Evernote, the U.S.-based notes syncing platform, is preparing to launch in China, says its CEO Phil Libin. The move would see the company hire 30 staffers in China – but first there’s the complex issue of forming Evernote as a legal entity in China and getting regulatory approval. It would also require Evernote having servers in China, raising the prospect of authorities accessing user data.
In an article in the Wall Street Journal, Phil Libin acknowledges that China is “the hardest” market to crack – but his approach is to “do the hardest one first, jump into the deepest end of the pool first — that’s how we tend to operate.” CBC Capital, one of Evernote’s newest investors, is believed to be assisting with the planned China operations. As for the regulatory and security aspects, the WSJ quotes Mr. Libin as saying:
We worry about all of that stuff, [but] you can’t allow yourself to be paralyzed by the worries … If Chinese authorities need access to Chinese data in a lawful way I don’t think it’s realistic to say we’ll be able to stop it.
He mentions the possibility of allowing Evernote users in the country to choose if their data is hosted on servers in mainland China or not. Currently, the Evernote apps do support the Chinese language, but all data goes via its US servers. If Evernote does indeed set up shop in China and thereby operates under a local media/business license, it will almost certainly be required to monitor and censor text or images that contain culturally or politically sensitive information – especially where it might be shared between users, such as in Evernote’s cloud-powered ‘notebook sharing’ function.
Evernote says it has 1.1 million users in China out of its 30 million worldwide.
The Evernote CEO has long been very active at conferences in China and around Asia. When we heard him talk in Beijing last November, he said:
We need to be in China. We don’t care about the markets [because] we don’t sell anything … The energy in China is what makes me want to be here.
But Evernote already has plenty of well-established local competition. Chinese web portal Netease (NASDAQ:NTES) already has over two million users on its similar Youdao Yunbiji service. Another local web giant, Shanda (NASDAQ:SNDA; FRA:RZP) has an Evernote-stlye cloud notes app caled MKnote, as well as a Dropbox-esque cloud backup service.