Zuck Networks in China

Facebook, with 500 million users, may be almost half as populous as China—but very few, if any, of those members are based in the world's largest country and Internet market.

That’s because Facebook is blocked in China—where U.S. search giant Google ran afoul of local authorities early this year because it bucked censorship demands.

And that may be why Facebook founder and CEO Mark Zuckerberg has gone to China. The 26-year-old billionaire was spotted at the offices of the country’s dominant search engine, Baidu.com, as he makes a long-anticipated tour of China. Zuckerberg has even been brushing up on his Mandarin for the trip.

While there, Zuckerberg met with Baidu boss Robin Li, the two companies confirmed. No word, though, on what the executives talked about.

“They’ve known each other for some time,” Baidu spokesman Kaiser Kuo told the Los Angeles Times of Li and Zuckerberg. “It does not foretell Facebook’s entry into China.”

Facebook has been banned in China since 2009. And that’s not likely to change even with the visit of the social network’s rock star CEO, writes Matt Marshall of VentureBeat:

The social networking site is arguably even more sensitive for Chinese authorities, given its potential use by activists as a tool for protest. So right now there’s little hope that things will change any time soon. Just imagine if Facebook were to enter China only to buckle later under Chinese government pressure. As it is, there’s a firestorm of protest whenever Facebook tinkers with its privacy settings or advertising policies. Add a Chinese presence to Facebook, and things would get nastier for the young company. Yahoo has been severely criticized in the past for handing over personal data to Chinese authorities. The trove of personal data that Facebook carries on individuals is huge.

While Zuckerberg may be trying to get the censorship changed, there’s no guarantee that even if authorities allowed the social network into the country, it would be the kind of hit there that it has been here.

That’s because China has tended to grow its own Internet powerhouses, and western firms have made little headway online there, even when they’re allowed. That’s because Chinese companies are intimately knowledgeable about their own market, and have an edge as a result.

Baidu itself is evidence of that. The Chinese search engine dominates the market in China the way Google dominates search here; in fact, before Google ran afoul of Chinese authorities, it lagged way behind Baidu in market share. DangDang.com, not Amazon.com, is the largest online bookseller.

And, the Times points out, China’s biggest Internet company is Tencent Holdings, which has 637 million accounts for its instant messaging service.

Venture capitalists who have invested in China know this, and tend to make their bets on Chinese companies. Firms like Vantage Point Venture Partners, Sequoia Capital and DCM all have funds designated in Chinese currency, and are actively investing in Chinese companies aimed at the immense Chinese domestic market.

Still, Zuckerberg is nothing if not ambitious. And he has been quoted as saying before: “How can you connect the whole world if you leave out 1.6 billion people?”

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Kent Bernhard Jr. is News Editor of Portfolio.com