NEW YORK (TheStreet) -- Shares of Facebook (FB) were lower in early afternoon trading on Wednesday, as it's developing a censorship tool to help persuade China to let it back into the country after being banned for the past seven years, the New York Times reported yesterday. 

New York Times technology reporter Mike Isaac broke the story and joined CNBC's "Squawk Alley" this morning to talk more about it. 

While free speech is an important value among Western Internet companies, Facebook seems to be thinking "more pragmatically" now, he said. "I think Mark Zuckerberg, his belief is if you can get at least some version of Facebook, even if it's a handicapped version of Facebook, into the country, that's better than no Facebook at all."

However, it's hard to see how the company will maintain its defense of free speech here in the U.S., while also promoting this censorship tool in China, he noted. "It's hard to see how they're going to come off as non-threatening to the Chinese in terms of speech." 

Part of the social media company's challenge in getting into the country will be finding a "sort of middleman entity" to deal with the Chinese government, Isaac said. The Chinese will need to "really trust" this entity so entry will be complicated. 

The Chinese are fearful of content going viral on Facebook, yet Facebook's "whole business model" is designed to embrace virality, Isaac claimed. "So to think of a world in which Facebook has to tamp down that sort of virality, especially to appease another state, is hard to really imagine." 

(Facebook is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Facebook as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that the team rates.

You can view the full analysis from the report here: FB

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