Facebook Inc (FB) And Xiaomi Inc Interested In Potential Investments In The Chinese Smartphone Company

The CEOs of the world’s biggest social network, Facebook Inc (NASDAQ:FB), and the number one smartphone maker of China, Xiaomi Inc, had meetings concerning the funding of the smartphone company prior to its last month fundraising drive. However, both the parties were unable to devise a method for the same hence keeping the social network company from entering the Chinese market. Facebook Inc’s social media network is banned in China like all the other major tech companies.

The primary reason behind the failure of a potential deal involves both political as well as commercial implications of the same, especially because Facebook Inc (NASDAQ:FB) is banned in China. Both the companies started exploring the investment territory in mid-2014 and a partnership would have given Xiaomi an international recognition and created a safe passage for Facebook to enter the Chinese tech industry.

In addition to the potential consequences, Xiaomi couldn’t risk its business relations with Google Inc (NASDAQ:GOOGL), as the smartphone maker uses Android for powering its devices. At the same time, the deal would have made the company politically vulnerable because of getting into a partnership with a U.S. firm.

Facebook (FB)

Earlier last month, Xiaomi announced the closure of its fundraising round with $1.1billion raised from the investors. Some of the primary investors include All Stars Investment (tech fund in Hong Kong), DST Global (private equity firm), GIC Sovereign wealth fund, Hopu Management (Chinese fund), Yunfeng Capital (Alibaba Group Holding Ltd (NYSE:BABA) Jack Ma’s fund).

Earlier, Facebook Inc (NASDAQ:FB) announced a potential acquisition of QuickFire Video Networks Corp. aiming better video delivering services on the social network. QuickFire is known for compressing videos without distorting the quality and it can help Facebook Inc to keep its users within the social network itself. The confirmation came from the video compressing company and some of its key employees are likely to join Facebook Inc (NASDAQ:FB).

This article has been written by Prakash Pandey.

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