MySpace prepares ground campaign for China, carefully

MySpace is negotiating its entry into China with a venture capital group and a former China Netcom Group exec, according to the WSJ (sub required), a sign that it is relying on local help to avoid the expensive mistakes made by other U.S. companies in China.

The report said the Rupert Murdoch, chairman of MySpace owner News Corp., is sending his wife Wendi Deng (pictured above) to plan MySpace’s entry into the world’s most populous nation, and that she’s in talks with IDG Ventures in China, and Edward Tian, the former China Netcom Group chief executive to help with the move.

MySpace’s move is significant because eBay and Yahoo, two other large U.S. Web companies that made earlier moves to China, have struggled against local competitors there. Yahoo, an early player in search, has invested $1 billion there, but has little to show for it. It has seen competitors spring up all around it. The controversy around Qihoo has been particularly bedeviling for Yahoo. Notable is that Qihoo’s investors include IDG, which is MySpace’s supposed ally. IDG also invested in Baidu, which has eaten Google’s lunch in China so far.

MySpace will compete against several other local Chinese social networking players, including 51.com. That company recently received $12 million (scroll down) from Sequoia Capital. Sequoia is also investor in Qihoo, and thus the Web of intrigue is spun.

Murdoch has made all the right moves. He has said MySpace’s local operations need to be very Chinese.

The WSJ reports:

IDG’s Chinese investment arm already has a joint venture with News Corp. operating a Chinese portal called Chinabytes.com. A person close to IDG’s Chinese venture confirmed it had held talks with MySpace. A Chinese news outlet reported earlier this week that Luo Chuan, the former general manager of MSN China, would become president of MySpace China on Dec. 8. Luo Chuan couldn’t be reached for comment.