LinkedIn said on Thursday that it was shutting down its professional networking service in China later this year, citing “a significantly more challenging operating environment and greater compliance requirements,” in a move that completes the fracture between American social networks and China.
LinkedIn, which is owned by Microsoft, said it would offer a new app for the Chinese market focused solely on job postings. It will not have social networking features such as sharing posts and commenting, which have been critical to LinkedIn’s success in the United States and elsewhere.
LinkedIn’s action ends what had been one of the most far-reaching experiments by a foreign social network in China, where the internet is closely controlled by the government. Twitter and Facebook have been blocked in the country for years, and Google left more than a decade ago. China’s internet, which operates behind a system of filters known as the Great Firewall, is heavily censored and has gone in its own direction.
When LinkedIn expanded in China in 2014 with a localized service, it offered a tentative model for other major foreign internet companies looking to tap the country’s huge, lucrative, and highly censored market. The company teamed with a well-connected venture capital firm, which it said would help it with government relations.
But LinkedIn also agreed to censor the posts made by its millions of Chinese users in accordance with Chinese laws, something that other American companies were often reluctant or unable to do. Even in 2014, LinkedIn acknowledged the challenge, saying, “LinkedIn strongly supports freedom of expression and fundamentally disagrees with government censorship. At the same time, we also believe that LinkedIn’s absence in China would deny Chinese professionals a means to connect with others.”
Seven years on, it has become apparent the experiment did not work. No major internet platform has followed in LinkedIn’s footsteps. Its business in China struggled as it ran up against major local competitors and a population skeptical about publicly listing valuable contacts.
“It has gotten pretty ugly around the world where authoritarian governments are forcing the private sector, particularly U.S. tech companies, into these dilemmas,” said Eileen Donahoe, executive director of the Global Digital Policy Incubator at Stanford University and former U.S. ambassador to the United Nations Human Rights Council.
She said LinkedIn was unusual in keeping a bare-bones product in China, rather than withdrawing entirely. “It is not so simple as ‘they are the bad guys, get out of there,’” she said. “There is a cost.”
The operating environment in China has also become more difficult. Since President Xi Jinping took the reins of the Communist Party in 2012, he has repeatedly cracked down on what can be said online. Presiding over the rising power of the Cyberspace Administration of China, the country’s internet regulator, Mr. Xi turned China’s internet from a place where some sensitive topics were censored to one where critics face arrests for a constantly shifting set of infractions, like jokes at Mr. Xi’s expense.
In March, the regulator rebuked LinkedIn for failing to control political content, three people briefed on the matter said at the time. Officials required LinkedIn to perform a self-evaluation and offer a report. The service was also forced to suspend new sign-ups of users inside China for 30 days.
The site also suffered as the U.S. relationship with China soured, with anger about LinkedIn’s complicity in China’s information controls rising in Washington. In recent months, after LinkedIn stopped displaying the profiles of several activists and journalists in China, American lawmakers criticized the company.
In one letter last month, Senator Rick Scott, Republican of Florida, wrote to Satya Nadella, Microsoft’s chief executive, demanding to know why it had censored the accounts of three journalists. Mr. Scott called the censorship “gross appeasement and an act of submission to Communist China.”
Beyond the fights over censorship, other challenges loomed. A new Chinese data security law requires firms like LinkedIn to store more data on local users within China and provide access to the authorities, which may have raised even more ire.
The shutdown cleaves apart one of the last social media bridges that linked China’s cloistered internet to the rest of the world, even if in a censored fashion. That may matter little to Chinese officials, who have cleverly used foreign social media blocked in China. In recent years, the government has been linked to a series of disinformation campaigns run on sites like Twitter and Facebook. Government and state media also advertise heavily on the sites.
LinkedIn also has served a separate purpose, as a recruitment ground for spies. Chinese intelligence services are among the most active at using it for that purpose, according to American officials.
China is one of LinkedIn’s largest markets, with 54 million users, behind only the United States and India. It does not disclose how much revenue each country generates.
Since Microsoft bought LinkedIn for $26.2 billion in 2016, revenue from the business has tripled. Mr. Nadella told investors in July that LinkedIn’s revenue had surpassed $10 billion in annual sales, up 27 percent from the previous year.
LinkedIn declined to comment beyond its announcement.
While Microsoft has tried to build a market in China for more than a decade, it has had only modest success. Last year, Brad Smith, Microsoft’s president, said the country accounted for less than 2 percent of its revenue.
Microsoft Windows and Office are common in China, but many people use pirated copies. The company has tried to overcome the issue, by hosting its software online and by tapping a major Chinese military contractor to help it offer an operating system better trusted by China’s government.
It has been a difficult year for private technology firms in China. Mr. Xi has overseen a series of investigations, bans and new rules that have laid low many of the country’s best known local internet companies, including Alibaba and Didi.
“The scale and scope of the crackdown in Beijing has been so jaw-dropping that not just domestic companies within China but even U.S. companies have now had to pull back,” said Dan Ives, an analyst at Wedbush Securities. “The last thing Microsoft wanted was to get into a political football situation in China.”
In a sign of the sensitivity around the news, Thursday’s announcement was not made by Mr. Nadella or LinkedIn’s chief executive, Ryan Roslansky, but by Mohak Shroff, the social network’s head of engineering.
Yet while the LinkedIn closure gets Microsoft out of one fraught business, it raises questions about the prospects of its search engine, Bing. The lone major American search engine still operating in China, Bing also censors results. In 2019, it was briefly blocked in the country, even as it continued to push users there to state media accounts on disputed topics like the Dalai Lama.
It remains unclear precisely what will happen to the millions of Chinese user accounts on LinkedIn. In the past, when foreign internet companies have stopped offering locally censored services, their sites have been quickly blocked by the government.
