China is known for its overpowering regime that cut many social media links between its citizens and Facebook, Twitter and YouTube users. Yet Facebook and Baidu may have treaded middle ground, reaching a compromise,  launching a new social networking site, an agreement that has not been yet confirmed by either Baidu or Facebook. It is believed Facebook obtained the license from the Chinese government and Baidu will have a 50% share of the new business.

A partnership with a media giant such as Facebook that has about 500 million users worldwide brought Baidu Inc. a sharp increase in shares price, up to $148.92 on Monday, from previous day’s close of $141.88.

“We view Facebook entering China as a positive headline for Baidu shares. Like Google (NASDAQ; GOOG), Baidu has been unable to bear any fruits in social media. Baidu may have a chance to achieve a meaningful presence, with the help of the Facebook brand name,” Susquehanna Financial analyst Ming Zhao wrote in a note to clients.

Chinese government officials are fully aware of the power of social media, especially Facebook and Twitter, which played a central role in the escalation of civil unrest in Egypt and Libya recently. Facebook is present in each corner of the world, playing an influential role at a political, social and economic level. Let us not forget the stir created by Facebook in Western Europe with regard to security issues, namely France and Germany.

Baidu in turn has been experimenting with social services lately, and it launched a music service in May via Baidu Ting through which users will able to stream and download music in a social networking environment.

An important aspect of this partnership and its success or failure is the number of competitors already present in the Chinese market; Tencent QZone, Renren.com and Kaixin001.com to name just a few.

“A Baidu and Facebook partnership has substantial potential. We view such deals with skepticism since similar joint ventures involving U.S. and Chinese companies to pursue opportunities in China historically have not been very successful,” Scott Kessler, a technology analyst with Standard & Poor’s, told Bloomberg.

Another noteworthy piece of news regarding Facebook is the outcome of the legal battle with twins Winklevoss on the origin of the Facebook idea. The twins had made a previous $65 million agreement with social media giant, that they afterwards reconsidered it and asked a judge to dissolve the handwritten settlement agreement. This was the twins’ last chance of using legal tools against Facebook, but now the relay is handed over to Paul Ceglia, Facebook co-founder that has been accused of fraud in the past.

The Chinese market has just started to blossom and the next strong partnership is between Intel and Tencent, for developing products and services around the chip maker’s MeeGo mobile operating system and devices using its Atom processors. The partnership is a continuation of last year’s joining of forces between the two on MeeGo. At the moment the innovation center is focused on product and services in the fields of tablets, security and gaming, comprises of 60 engineers, but will expand to 200.