Gady Epstein posted a nice article bringing attention to a letter written by Assistant Senate Majority Leader Dick Durban. His letter, sent to Baidu CEO Robin Li, directly addresses the concerns that the politician has over the development of social networks that are lacking in their protection of human rights. He speaks not just about Baidu, but also about the potential partnership that Baidu may be seeking to enter a joint venture with Facebook. The folks at Facebook have denied any definite plans to band with Baidu, but it seems that all signs are pointing in this direction. Epstein includes the full text of Durban’s letter within his post, and it is well worth reading.
What does such a letter actually accomplish? Durban is bold and direct in the concerns that he addresses, and goes so far as to ask for a reply from Li with the safeguards that his company provides for it’s users. The letter holds a distorted feeling, one that is characteristic of the interaction between politicians and corporations; it seems both friendly and threatening at the same time. The first time I read through it, I could not see how it would have any real effect on Baidu. The government and many Chinese organizations are accustomed to shrugging off the pressures placed by American politicians. But toward to middle of the letter there is a key line in which Durban points out that Baidu, which is listed on the NASDAQ exchange, is subject to American policy. Once I read through this, I quickly agreed with Gady. It will be difficult for Baidu to do anything but reply.
This is an interesting set of developments within the Chinese internet realm. Social media is on the verge of an explosion, and Facebook really does want in. But if Facebook places its eggs in the Baidu basket, what then? New legislation seeking to place human rights requirements in American based social media networks could really put a wrench in the works. As it has been pointed out by Liz Gannes, international users would have to bypass a warning that states that the Chinese government would be able to monitor interaction between Chinese and non-Chinese users, a warning that is likely to hurt interaction between the Chinese and other markets. These are crucial factors in the success of Facebook, and if I were to predict, I think a storm is coming.