The biggest “international” question being asked about Facebook’s IPO is “what about China?,” where they are blocked (like Twitter) by the government. Many pundits see China as key to Facebook’s long-term growth efforts given it is has the largest number of users online. The irony is that even if the government unblocks Facebook, which Mark Zuckerburg is apparently actively pursuing, the probability of Facebook making money and/or building a substantial market share is extremely low. I completely agree with Saun Rein, the author of The End of Cheap China who addresses this directly on the always stellar show, Bloomberg West.

I cannot think of any foreign, consumer-focused online/web portal, service or social network that is a market leader in China. Even the local China leaders in this space (Renren, Youkou, etc.) have their own issues monetizing their business. Renren (RENN) makes a bit over US$30M per quarter!

Apple makes money in China because they sell aspirational, tangible “devices.” And even though online web services, video/music streaming and mobile app downloading are all hugely popular, nearly all of it is free. Rein talks about a Chinese worker that makes US$250/month that bought a $1000 iPad (Apple products cost significantly more in China than in the US). I recently recommended a cool iPad app to a Beijing friend who is very wealthy, and his response was “not interested, its a paid app.”

Given Mark Zuckerburg’s aggressiveness and zeal, and apparent passion for being in China, my guess is that Facebook will eventually be made available in China. But will it ever find success like it has in India (where it has >80% market share)? My answer is emphatically no.

Does that mean internet service and/or social networking sites have no opportunity to succeed? Absolutely not. But it requires a unique business model with local partners that is very different than how the company succeeds in other country markets.