Why Lei Jun rejected Zuckerberg's olive branch

Editor's note: Rather than saying Lei Jun refused, it's more like he was worried. Xiaomi wants to expand beyond China, and Zuckerberg doesn't want to give up the Chinese market. So, I think it's only a matter of time before the two of them work together.

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Xiaomi wants to go global and Facebook wants to come in, and their demands coincide.

One day in August 2014, at dinner time, several foreign friends came to Lei Jun's home, one of whom was Zuckerberg.

The news that Xiaomi raised $1.1 billion and was valued at $45 billion is still fresh in our minds. More information about this round of financing has been leaked, this time about Facebook's "failed" investment in Xiaomi.

This was actually an informal conversation, and there was no written record of the communication between the two parties. However, Reuters still contacted several people who knew about it.

It is said that Lei Jun and Zuckerberg weighed many factors regarding Facebook's investment in Xiaomi, mainly involving commercial and political factors, although it was revealed that the investment amount was not large.

One of the people familiar with the matter said investment discussions between Facebook and Xiaomi began in mid-2014.

However, Lei Jun was unable to accept the olive branch extended by Zuckerberg. Apart from political concerns, Lei Jun's biggest concern seems to come from Google. Xiaomi's MIUI is developed and built based on Android, and Google is one of its important partners. A close relationship with Facebook may affect the cooperation between Google and Xiaomi.

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Obviously, Facebook's investment will increase Xiaomi's popularity, inject more international genes into the latter, and further reach the huge user base of 1.3 billion worldwide.

Facebook seems to have hit the ceiling in the development of global social networks, and has begun to expand its influence through acquisitions, such as acquiring WhatsApp and Instagram, and developing different social segments. Due to China's relatively closed network environment, Facebook has been trying to return to China in the past five years since 2009, as can be seen from Zuckerberg's frequent visits to China. Among them, the most likely and feasible way is to choose a domestic partner. Xiaomi has experience in operating social networks (Mi Chat), which can be regarded as a relatively ideal partner. However, China already has QQ and WeChat, and it is still unknown whether it can accommodate another social network.

Compared with Facebook's dream of entering the Chinese market, Xiaomi's desire to "go global" is stronger and its pace is more hurried.

Xiaomi has already appeared in markets such as Indonesia, the Philippines, Malaysia, Singapore, and India. In order to expand its overseas presence more easily, it has turned to using Qualcomm processors on its mobile phone platforms, hoping to use Qualcomm's patent pool to protect itself and avoid being "harassed" by many manufacturers due to insufficient patent reserves. Xiaomi's experience in India is a lesson for it. Although it was eventually safe and the product was put on sale again, it is still a time bomb buried on Xiaomi's overseas journey.

On the other hand, Facebook does not seem to be so eager. Although there are often news about Facebook entering the Chinese market, it is often just a rumor. In contrast, the pace of LinkedIn, a professional social network, entering China is undoubtedly much smoother and it has quickly adapted to local rules.

As for the details of Xiaomi's $1.1 billion financing, investors include Hong Kong All-stars, DST, which has invested in Facebook and Alibaba, Singapore GIC, mainland China's Hopu Fund, and Jack Ma's Yunfeng Fund. In this round of financing, another "failed" investor was ICONIQ Capital, an asset management fund of many Silicon Valley celebrities including Zuckerberg, but sources said that its investment intention was not led by Zuckerberg.

Good things come to those who wait, and the marriage between Xiaomi and Facebook just came to nothing.