Evernote has announced plans to expand to Asia, and has requested the government to approve the building of a data center in the mainland. However, even with the big potential market (about half a billion Internet users, and a billion mobile users), China is a hard market to crack, notes Evernote CEO Phil Libin. Still, even with the regulatory challenges, Libin says the company wants to "do the hardest one first."
Evernote isn't exactly alien to China. Unilke social networks such as Twitter, Facebook and a host of others, Evernote is not banned from within the so-called Great Firewall of China. The cloud-based note-taking service has about 1.1 million users in the mainland out of its 30 million total users. These connect through the company's U.S. based servers. But, even while the service is popular for U.S. users, it faces competition from similar Chinese offerings such as Baidu Wangpan (which also competes with Google Drive).
At present, Evernote is not compelled to comply with Beijing's regulations on censorship or restricting the flow of information. Evernote is more of a private service rather than a social network. As such, the Chinese government has no reason to censor information. "The Chinese government [does not] care what you think, or what you save on a server if it is accessible only to you," says an English-language blogger from China.
However, activists or anyone organizing protests against the Chinese government might expect the Chinese government to look into their online data, which would be easier once Evernote stores data physically in the country. There has been a precedent, with the Chinese government jailing a local journalist based on data found in local Yahoo! mail servers.
Evernote has recently raised US$ 70 million in financing, and is gearing up for an IPO. The company plans to use funds for international expansion, especially in China. Will plans to host data in China be a challenge, especially given the sensitive nature of information for the Chinese government? Or will a significant presence in the Chinese market act to boost Evernote's user base and viability?