The social network is adding more language capability, further proof that growth outside the U.S. is vital for Facebook and MySpace
Facebook is stepping up its international expansion. The Palo Alto (Calif.)-based company will introduce tools that translate the site into four additional languages: Dutch, Italian, Norwegian, and Polish, BusinessWeek.com has learned. In the coming months, Facebook also plans to include another 20 languages, including Chinese, says Javier Olivan, international manager at Facebook, in a telephone interview from Germany. Facebook already offers Spanish, French, and German translation tools.
"The international component is really important for us," Olivan says. Expanding abroad has become a key source of audience growth for Facebook and MySpace, the largest U.S. social network. Of Facebook's 110 million users worldwide, more than 60% are outside the U.S. Non-U.S. users account for more than 30% of the 117 million people registered for MySpace, owned by News Corp. (NWS). What's more, audiences are growing faster abroad than in the U.S., where both sites are starting to plateau among the 18- to 34-year-olds most likely to spend hours socializing online each month.
A Slow U.S. Ad Market
The foreign audiences provide a key financial benefit, too. MySpace expects that advertising to non-U.S. audiences will soon account for 50% of the site's revenues, says Jeff Berman, MySpace's president of sales and marketing. The company has launched 29 country-specific sites in the past couple of years with Indian and Korean sites rolling out just last month (BusinessWeek.com, 10/8/07). The strategy is to expand to markets where the U.S. site has already generated buzz and where advertisers have interest. "We are being strategic about where we expand," Berman says.
Getting big abroad is particularly important as social networks find it harder than expected to crack the U.S. online ad market. On May 13, eMarketer analyst Debra Aho Williamson cut projections for 2008 U.S. social-network ad spending (BusinessWeek.com, 5/13/08) by $200 million, to $1.4 billion. She blamed an economic slowdown that's putting pressure on advertising budgets and social-networking executives who made overzealous revenue forecast estimates for the year. "Finding what works takes a lot of time and it is moving more slowly than these companies had expected," Williamson says.
Teams vs. Translation
While MySpace and Facebook see much future revenue coming from foreign friends, the companies have very different ideas of the best way to grab audiences abroad. MySpace has focused on rolling out country-specific sites, complete with a local MySpace office that tailors content to specific audiences.
Facebook has instead focused on providing a technical solution—a one-click downloadable application—to translate the existing U.S. site into other languages. The company also invites users to help translate terms such as "poke," Facebook's unspoken equivalent of "hi," and then submits nominated terms for a vote. (In the Spanish-language version of the site, "poke" is "toques.")
Both strategies have benefits. Facebook's strategy helps the company enter new markets swiftly. The company is able to reach a whole new base of potential users without first hiring people to run a local branch. "Through the translations we are seeing mass adoption in those markets," Olivan says. He adds that because the site is a communication tool, the company doesn't need to do much else to localize it. "The translation approach allows us to support literally every language in the world," Olivan says.
MySpace's Berman says local bureaus can tailor the site to the tastes of users in specific countries, thus helping fuel adoption. For example, the site launched in Spain with a concert by the Smashing Pumpkins, an American band that is more popular in that country than it is in many parts of the U.S. Berman credits the concert with helping to hype the site. "Our teams are all based in local countries with local ad-sales teams," he notes.
Another reason to bulk up abroad: MySpace and Facebook face competition from homegrown social networks and other social media. In China, for example, free instant-messaging service QQ is the main way many Web surfers keep in touch. Google's (GOOG) Orkut social network is popular in Brazil and India. Social network Hi5 is ahead in many parts of Central and South America.
A key to outdoing the competition is the sites' developer workshops, where executives from MySpace and Facebook go to local countries and help people seeking to create programs for the social networks. The myriad programs created for the sites since opening up to third parties have helped fuel additional growth both in the U.S. and abroad. MySpace's development team has held so-called DevJam events in India, China, Japan, Australia, Sweden, and Britain, among other countries. On May 14, Facebook held its own Developer Garage in Germany. Olivan attended.
The other big factor in the sites taking off internationally is simply having a critical mass of users. Friends bring their friends, who in turn bring other users. Olivan's hope is that the social network will become a critical communication tool, akin to the phone. "People use the phone all over the world," he says. So, why not Facebook? The world's Norwegian speakers will soon get their chance.