Tech

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

It took Facebook eight years of fighting tooth and nail to reach its first 1 billion users. Getting to the next 6 billion people in the world is proving far tougher. 

The company has been in the news because of controversy about its program in India to offer a selection of Web services (including Facebook) that people can access free on mobile phones, even over slow Internet connections. The idea behind Facebook's "Free Basics" program is to make it easier for lower-income people in India to have their first taste of the Internet by making it affordable to go online. Surfing the rest of the Web costs money. 

My colleague Andy Mukherjee sided with the opposition, which questioned whether providing Facebook free unfairly shuts out potential competitors and gives the company a pole position to pick what is considered a core Internet service. Fair enough. Regardless of the intentions behind Free Basics , Facebook from the beginning miscalculated the criticism in India, and the company has continued to defend itself long after it became clear it couldn’t recover from its early missteps.

Plugging In
Big Internet companies like Facebook are confronting their biggest obstacle to growth: Getting the world online despite economic and other challenges.
Source: World Bank, 2014 data

An alternative would be to mirror the approach used by Mozilla, the company behind the Firefox Web browser, which has helped subsidize the prices for Internet-connected cellphones and mobile Internet access in some emerging markets. If Facebook took a similar approach in India, it would give people an Internet on-ramp to whatever Web destinations they wished without putting Facebook in an inherently conflicted position as a gatekeeper to India’s Internet. People are likely to disproportionately use their phones to gain access to Facebook and Facebook-owned WhatsApp anyway.

This Plan B is far from perfect. A small amount of free Web data doesn't go very far, and surfing the Web on mobile phones over bare-bones cellular connections is worse than waiting for pictures to load on AOL, circa 1992.

The point is, connecting billions of people to the Internet is a tricky economic, political and social puzzle, and yet Facebook, Google, Amazon, Uber, Twitter and many other Web companies need to grow by reaching the two-thirds of the world's population not online today. 

Mark Zuckerberg knows this, and that's why he has been talking for years about increasing the global numbers of people online by making mobile Internet access more compelling and affordable. It's a laudable goal and one that not coincidentally dovetails with Zuckerberg's economic interests to ensure Facebook services are within reach and essential for billions. 

Expect to hear far more in coming years about missteps in India, Indonesia and other large countries that ambitious technology companies see as huge potential markets. Consider that India has nearly as many people as China, but just 18 percent of Indians used the Internet at some point in the previous 12 months, according to World Bank data from 2014, compared with about half of the population in China. Even in isolated Cuba, 30 percent of the population is online.

Mind the Gap
A majority of Facebook's users are outside of the U.S., but the company makes far less money from each user in the developing world than it does in its home market.
Source: Facebook

The future Web winners will be determined not only by the quality of their technology but also by their abilities to navigate thorny global politics. If Facebook is finding India tough sledding, imagine what will happen if and when it is ever allowed to open its doors in China. Google in nearly every country is fighting regulators that believe the company is abusing its power. Large and small technology firms are tussling with lawmakers worried their services let criminals and terrorists evade law enforcement. 

It is interesting that Google (for now) hasn't faced the same loud criticism in India and other emerging Internet markets. Google also has ambitions to expand global Internet access -- which benefits its Web search engine, YouTube, Android and other businesses. Yet Google executives have smartly focused the public's attention on projects that seem innocuous, like beaming Internet connections to rural areas by hot air balloons or setting up Wifi connections in Indian train stations. Who can oppose that? It helps that Google has grown a bit more shrewd after picking up battle scars from its own global mistakes

Facebook has learned from its missteps, too. At first the company tried to persuade mobile phone companies in India and other countries to include on cellphones a free version of Facebook and a cherry-picked selection of partners. Recognizing this approach was too self-serving, Facebook shifted gears last year to create an app for people to use not only Facebook-blessed services but any website that could be optimized for bare-bones mobile Internet connections. 

As Facebook is learning, making Web services compelling and within reach for the world won't be easy. And it becomes harder as Internet companies grow bigger and more powerful, which makes people understandably suspicious of their motives.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Facebook is up and running with Free Basics in more than 35 countries, and the company says half of the people who start using the free Web program begin paying for some Internet services within 30 days. 

  2. It has been suggested Facebook's Free Basics will be the way the company -- whose services are effectively banned in China -- plans to enter the biggest Internet market of all. 

To contact the author of this story:
Shira Ovide in New York at sovide@bloomberg.net

To contact the editor responsible for this story:
Daniel Niemi at dniemi1@bloomberg.net