Viadeo, the French rival to LinkedIn, is to exit China in order to focus on becoming a profitable business. In a further cost-cutting move, it will also shutter its data center in California and migrate to the cloud.
The company moved into China eight years when it acquired local professional social network Tianji.com, but that site will cease to exist on December 31. Viadeo claims that Tianji has 25 million users, but it has struggled to attract the “very considerable development resources” necessary to drive it forward in “China’s fiercely competitive market”. Viadeo had planned to use one-third of the proceeds from its 2014 IPO to develop Tianji.com, but the listing didn’t raise enough capital and the firm wasn’t able to pull in money from private investors.
“In the first half of 2015 the company went looking for an investor, buyer or local partner, who could guarantee stability and commitment to support it in this market,” Viadeo said in a statement. “However, China’s changing economic conditions marked by a historical slowdown in growth, a major financial crisis in the summer of 2015 and repeated devaluations of the nation’s currency dashed hopes of identifying such a partner.”
Post-China, Viadeo said it will refocus on its home market of France and other French-speaking countries, while putting great emphasis on its B2B sales model.
Viadeo’s foray into China was a fascinating one, since it doubled down on the country in 2011, a time when Twitter and Facebook were heavily linked with opening local operations there. The company two-sided play — having a global site (Viadeo.com) and a China-only one (Tianji.com) — was a model that both of the U.S. social networks had reportedly shown interest in.
In contrast to Viadeo’s troubles in China, LinkedIn seems to be finding some success there. The U.S. social network opened a joint-venture with Sequoia China last year. LinkedIn China isn’t a totally separate site, but it does block some content from China based on the country’s web censorship regulations.