Social networking; a global phenomenon
October 29, 2007
Many people assume that social networking is a strictly western past time, with the vast majority of users coming from the U.S. and western Europe.
Not true at all! The latest figures from comScore show that it’s a truely international phenomenon and is actually being lead by the Asia Pacific region at the moment.
This leads me to deduce that it’s not all about Facebook and MySpace. Neither have the presence in these other areas of the world. Orkut, Google’s social network offering, is massive in Latin America and making waves in Asia, but something else must be contributing to these Asia Pacific totals.
Engagement wise, it’s Latin America leading the way. The average social network user in Latin America spends much more time engaged in social networks than users in North America or Europe. Could it be that Orkut is more engaging than Facebook?
The figures above would seem to suggest that although Asia Pacific are heavy users of social networks they are not as engaged and are using them for different purposes to the Americas (perhaps).
Lastly comScore have a breakdown of the regions with what social networks they prefer.
This is where it suddenly jumps out that Friendster is doing really well in Asia, and that a network called CyWorld accounts for a lot of the numbers in that area but doesn’t figure at all in EU or U.S. Also obvious from these figures is that Facebook just doesn’t feature in Asia or Latin America, they have a massive opportunity to break into these regions and gain a lot more eyeballs!
The Facebook valuation; some thoughts
October 25, 2007
Just a quick post to publish some of the thoughts that are appearing on the web about the huge valuation of Facebook. The $15B valuation makes it the 5th most valuable U.S. internet company according to Michael Arrington at Techcrunch .
Is a company with no evidence of profit actually worth such a huge sum? Possibly; it has the traffic (the most important thing for any site which will derive most of it’s revenues from advertising), it’s just signed a deal with a good technology partner (Microsoft), it’s open standards should help it (unless of course MS integrate their services with it, how open would it’s platform be then?) and with the current bubble mentality it’s likely to get more investment very easily.
The BBC has published 15 reasons why Facebook may actually be worth $15B. Very interesting, my comments interspersed in blue:
1. The network has gone viral in the last 12 months, with more than 50 million users worldwide and a user base that is growing faster than great rival MySpace. According to Facebook, it adds 200,000 new users each day.
Yes, it’s certainly a traffic monster! The growth rate is astounding, but that could slow as it must reach a saturation point eventually. The eyeballs is great for advertising revenue though so that should guarantee them a profit (eventually). They need to be careful to avoid the saturation point though, keep it fresh, become the webtop of choice and don’t let anyone launch something more interesting (or the fickle web users will forget about you very quickly).
2. The average user spends 3.5 hours a month on Facebook – more than the average user on rival MySpace – which is increasingly attractive to advertisers.
Funny one this; I don’t spend long on it at all, in fact I’ve taken to updating my status via a browser plug-in now. So a lot of people must be using Facebook as their email and communication alternative, that’s what they need to do to keep the eyeballs, become a default location for peoples web browsing.
3. Facebook is the current Web 2.0 darling – popular with ordinary users and “tech heads” alike.
Darling of the moment, but it could easily slip from being the techies darling, especially with Microsoft on board.
4. US research reveals that Facebook users come from wealthier homes and are more likely to attend college than MySpace users – increasing that attraction for advertisers.
Not sure on this one; often the more prosperous will be the earlier adopters anyway, and as Facebook descends closer to the more chavy MySpace I believe the demographic will change anyway.
5. Microsoft’s investment makes them a serious player in the growing market of “social advertising”. Social network profiles are full of personal data that users voluntarily hand over, which is very useful for targeting adverts.
Big point this one! The data Facebook is gleaning is amazingly powerful to an advertising network. Facebook could be one of the first websites to carry adverts that are actually contextual and useful to their targets, this can result in a huge revenue stream if done right.
6. Sixty percent of Facebook users are outside of the US – so Microsoft’s investment buys access to a global audience quickly and simply.
Microsofts ad network is global anyway and there are plenty of other places they could have invested in to get a global market. Global doesn’t matter as much as size (as the old adage goes).
7. Facebook is the new web: The decision to open up the network to outside developers turned Facebook into a destination for many uses, like messaging, photos and video. Of course, as Facebook is on the web it could never really be the new web.
Facebook could be the newest web if it integrates with Microsoft Live platform… That could be huge and really make it into a webtop.
8. Every major content firm with an online presence is either working on a Facebook application or has already launched one – from Google to the BBC.
Hype; everyone will always try to dive into something new which gains popularity as quickly as Facebook. I don’t believe that is any sign of value.
9. According to a report, 233 million hours of work are lost each month in the UK due to staff looking at social networks. Advertisers can now target people when at their desks.
Advertisers have always been able to target people when at their desks, now they can target them on another site where people are actually very engaged and in my opinion less likely to interact with adverts than a traditional site or portal.
10. The openness of Facebook is attracting a wealth of talented developers who can launch their applications to millions of users quickly.
Yes, but this helps those developers make money it doesn’t increase Facebooks value directly, only indirectly. Of course the better the developments the greater amount of traffic is attracted…
11. Facebook messaging is the new e-mail. Everyone feels stressed from a deluge of e-mail from unwanted people and companies. But Facebook messages are always from friends.
How long till spam becomes a feature of Facebook??? If Facebook could integrate with Live Mail and become the email destination of choice that would be the coup of the decade.
12. Facebook’s “status updates” have become the easiest way to let friends know what you are doing and how you are feeling at any given moment.
Along with Twitter and a multitude of other status alert services. I do like the Facebook status engine, but it can get annoying. We need better ways to filter the types of alerts sent!
13. Facebook thrives on playful applications such as Pirates, Zombies, Super Wall and Top Friends, which have made the network a place to play as well as communicate.
And they add no value! All style no substance this aspect of Facebook, it needs more productivity apps and networking features to be really succesful and not end up another MySpace.
14. Facebook is the acceptable face of blogging – you can reflect your life and personality online without being seen as a “blogger”, which often carries a geeky stigma.
Geek? Me??
15. Facebook is worth $15bn only because Microsoft says so. The value of Facebook is based on a 1.6% share of the firm being worth the $240m Microsoft paid for it. Microsoft and Google were in a bidding war for a slice of the firm and both companies have large pockets. This was not just business, this was personal, according to some analysts.
Very true! It will take a market valuation for me to believe it is worth so much, and even if it had one I’m not sure $15B is worth it in it’s current state. A year down the line, if it becomes a web starting point of choice then it may command a valuation many times higher!
Some good, thought provoking points from the BBC there!
