Facebook doesn’t want world domination: it needs it — Tech News and Analysis
Now there are only five markets where Facebook is not the #1 social networking site,” a comScore spokesperson told us. “What’s interesting here is that Vietnam, Japan and South Korea are amongst the top four fastest growing markets, with year-over-year growth rates of 80 to 270 percent.”
But these remaining countries are also the toughest nuts to crack. And the biggest prize of all, China, may need a sledge hammer — after all Facebook is blocked by the country’s Great Firewall.
If it can piggyback China’s explosive broadband and mobile internet adoption, Facebook’s own growth may surge even further. But this will be anything but a walk in the park.
Investors have been warned. Facebook’s s-1 filing cautioned:
“We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government.
“In the event that access to Facebook is restricted, in whole or in part, in one or more countries or our competitors are able to successfully penetrate geographic markets that we cannot access, our ability to retain or increase our user base and user engagement may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected.”
China’s state authorities grant spartan online operating licenses to overseas players, especially powerhouses, leaving the market to indigenous networks, which themselves are allowed to operate only under a strict regime of monitoring and censorship by the government.
That is a controversial and technically difficult task for any social network. But, if it’s good enough for China’s own, it may be a move that Facebook, too, has to consider if it wants to break in.
But it’s not just China that could prove tricky. Google can attest to the difficulties of launching in unfriendly countries. Its $140 million acquisition of the Rambler portal’s Begun contextual ad agency was blocked in 2008 because of what Russian competition authorities said was insufficient paperwork.
And, while trying to make inroads to its five target nations, Facebook must also be on its guard to make sure it protects its leading position in other markets, many of which are small enough that launches or improvements from indigenous competitors could have profound impact.
The revenue question
Even if the company can push growth numbers by securing a dominant position in every single one of the world’s countries, there is another big question: how to keep revenue going up internationally too.