The Wall Street Journal has confirmed WSJ blogger Kara Swisher’s earlier scoop that Hong Kong tycoon Li Ka-Shing will invest $60 million in Facebook, and speculation has–not surprisingly–centered around what this might mean for Facebook’s China plans. Li, after all, was behind Tom.com; that portal was the main conduit for Skype’s entry into China, and Li’s investment in the Zennstrom/Friis new TV play Joost has led many to assume that the ad-supported, P2P-based Internet TV service will be in China too, likely through Tom.

First of all, let’s finally put to rest some of the other Facebook/China rumors:

  • Facebook did NOT recently register a .cn domain name. They did it back in March 2005, long before they were a household name.
  • A Facebook spokesperson has rather vehemently denied rumors of an acquisition of Chinese campus social network Zhanzuo.
  • While a rumors in the Chinese press about Facebook being in talks for a $100 million acquisition of Tianwang has some foundation–the company’s CEO told a friend of mine that they had spoken to FB, but were in the very early stages of discussions–things may have gone very wrong after the company’s COO went off the reservation and started talking telling the Chinese press about it in unusual detail.

Here’s what a colleague of mine, who must remain nameless, had to say on the matter:

When I first read about it I thought, poor guy… he really shouldn’t be playing with this.

Then I saw TOM’s share price go up 48% in one day (which was instantly worth more than the $60m and the market cap is still more than $60m up on recent lows). TOM are denying everything, as they have to since the stake is being acquired by his personal foundation and was only confirmed yesterday.

When you look at the deals TOM has done with eBay and Skype (I believe the Skype deal is going really well and the eBay deal was on very favourable terms ) if $60m gets them the Facebook China deal then its a small price to pay!

Facebook needs a China strategy and all the rumours recently would suggest they have at least been having conversations about it. If you look on Alexa (I know it is hopeless but it is at least indicative) Facebook is normally in the top 50-60 sites in China already.

All depends on whether he gets the deal or not, taken a leaf out of Stanley Ho’s book and had a gamble?

Personally I wouldn’t rule out the possibility that it’s just an investment in what he rightly believes is a very hot piece of Internet property. There may be no China angle to this at all. Then again, there could be. Stay tuned, gentle reader…