Social-networking sites going global

MySpace, Facebook and other social-networking sites aren't just slugging it out for customers in the USA.

They're expanding aggressively overseas, where a vast majority of Internet users live.

Most are targeting Asia and Europe, both of which have more users of social networks than the USA, and are growing at faster rates, according to data from market researcher ComScore Media Metrix. Some are launching new sites, others are offering translation applications, and some are acquiring sites that are popular in specific countries, such as Russia.

About 80% of the world's estimated 1.2 billion Internet users are outside the USA, according to Computer Industry Almanac. Half the $40 billion online advertising market is non-U.S., says eMarketer.

"It's a land grab, as well as a form of insurance in case the U.S. market proves itself to be fickle," says Marissa Gluck, an analyst at Radar Research. "When you look at Internet use globally, the U.S. is a small but significant chunk. It's also beginning to plateau in terms of growth."

Facebook has developed an application to translate words on the site from English into other languages. On Thursday, Facebook said a Spanish translation is available. Anyone who wants to view Facebook in Spanish can change their language preference from their account settings. German and French versions are expected in coming weeks.

"Unlike other companies, we are not launching separate sites for different countries," says Matt Cohler, vice president of strategy at Facebook. "This is driven by local users."

In September 2006, 7% of Facebook's 10 million active users were outside the USA. Today, 60% of its 63 million active users are.

This year, MySpace is opening operations in Russia, Turkey, Poland and Portugal, among others. It opened its first office overseas, in London, in May 2006. It's in nine of the top 10 Internet markets. The 10th, South Korea, could soon be next.

"We see a surge of growth overseas, and more potential users than the U.S.," says Travis Katz, managing director of MySpace's international operations in 25 countries. About 45% of MySpace's 110 million members are outside the USA; a year ago, it was 15%.

This month, LinkedIn, the popular networking site for professionals, opened its first office outside the USA, in London. It expects to double its customer base in the U.K. to 2 million this year.

"We are living in a global economy, and all of these economies are interconnected," says Dan Nye, CEO of LinkedIn. Half its 18 million members are outside the USA.

Yet the international market is no slam dunk.

Some social-networking sites, such as Hi5, decided to establish themselves overseas first and let others slug it out in the USA. And many countries have home-grown social-networking sites, such as Mixi in Japan and Skyrock in France, Gluck says.

"When we launched in late 2003, we saw the opportunity for more rapid growth outside the U.S.," says Ramu Yalamanchi, founder and CEO of Hi5, which has 70 million registered members in more than 200 countries. "We tailored our sites — be it the use of color, localized ads or design — to meet the unique interests of each country," he says.

Russian media company SUP has parlayed the purchase of a San Francisco Bay Area blogging service into its status as the leading social-networking player in Russia.

The December acquisition of LiveJournal, a business partner of SUP's, for an undisclosed sum, has established SUP as the fourth-largest website in Russia. CEO Andrew Paulson says it is poised to follow the same strategy in other countries where there are no clear leaders in the social-networking market.

"We're building media properties around the world through social-networking services," Paulson says.

International markets also are appealing to social-networking sites that fizzled in the USA. Google-owned Orkut has a strong beachhead in Brazil, "and Friendster was given a second chance in (Southeast) Asia," analyst Gluck says.