The online economy, for all its chaotic variety, still seems to produce dominant -- or even monopolistic -- companies, which take the lion's share of revenues in their markets. In 2009 Google raked in $23.7 billion, or 79% of a total search market of just over $30.1 billion. Now a similar dynamic is emerging in the burgeoning world of social media.
That's according to eMarketer, which predicts that total social media revenues will reach $6 million in 2011, including $3.1 billion in the U.S. -- with social networking behemoth Facebook taking $4 billion of the global total and $2.2 billion of the U.S. revenues. That works out to 67% and 71% of the global and U.S. markets, respectively.
The same forecast sees some interesting trends developing: for one thing, eMarketer sees the proportion of revenues coming from overseas increasing substantially over the next couple years. In 2009, overseas advertising contributed just $180 million or 24.3% of Facebook's total revenues of $740 million. That increased to $650 million or 35% of total ad revenues of $1.86 billion in 2010. The 2011 figure represents 46% of Facebook's total ad revenues. And in 2012, Facebook's total revenues will climb to $5.74 billion, with overseas revenues contributing exactly half, also according to eMarketer.
As noted in previous columns, Facebook's penetration of foreign markets is actually very uneven. Where Facebook has attracted around 150 million users in the U.S. -- just about half the U.S. population -- the rate is much lower in countries like Japan (1.6% of the population), Brazil (4.7%), Russia (3.2%), and India (1.7%).
However penetration is higher in other parts of the world: the U.K. had the highest rate, with 28.4 million members out of a population of 62 million, for 46% penetration; Turkey has 24.1 million Facebook members out of a total population of 74.8 million, for 32% penetration; and Indonesia has 32 million Facebook members out of a total population of 238 million, for 13.4% penetration.
COMMENTARY: At the end of 2010, the U.S. led in members with 145.7 million out of an estimated 500 million members. However, Facebook's growth in the U.S. has really slowed down as it approaches peak penetration, which is probably about 55% of the U.S. population. In fact, growth rates for most developing nations are slowing down as they too, reach maximum penetration levels.
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Facebook's current growth is being driven primarily by Asian countries, but Facebook has made little progress in penetrating India, Korea and Japan, where its penetration is in the low single digits. I have written about this before, but most of the blame falls on Facebook itself, there is a wide cultural divide and user experience issues that Facebook can't seem surmount. China has banned Facebook, but there is no guarantee that it will gain traction there, even if the doors were open.
Across the five Southeast Asian markets of Indonesia, The Philippines, India, Malaysia and Thailand, there are close to 85 million registered Facebook users, given that there were a shade over 110 registered users across the whole of Asia on 1 January 2011, according to Social Media Today, South East Asia has emerged as the dominant force for growth across the continent with the five biggest SE Asian countries seeing almost 150% growth collectively in 2010 and a staggering 2,404% increase in members since January 2008.
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The most rapid growth in Facebook members has been experienced by Brazil, Thailand, India, Mexico and Poland.
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It does make you wonder whether Facebook will ever reach the 1 billion members predicted by the young redhead Zuck. China remains Facebook's ace card and could change the entire equation if the doors are ever open to it.
Courtesy of an article dated February 4, 2011 appearing in MediaPost Publications The Social Graf and an article dated January 7, 2011 appearing in Asian Correspondent.com
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