Sunday, July 10, 2011

Facebook faces problems

Facebook is surely under huge pressure right now as Google is actively testing its newly-launched social networking service Google+ among invited users. Some have revealed that Google+ offers more desirable features for users to better manage their social ties, like the circles feature, and the multiperson video chatting.

Here comes a little bit more disturbing news for Facebook. Accoring to the special report from this week's Economist, Facebook's international expansion strategy may well face some challenges in the future (see the chart below, click to enlarge). More competition? Well, that's for sure. But what is more important is whether Facebook could (or is willing to) adjust its conventional business model to fit the social norms and the culture in its new intended territories.

Take Japan as a typical example. Although in most countries, the number of Facebook users far exceeds that of the users of Twitter, 5 times more or in some cases, even 6 to 8 times. However, in Japan, this ratio is less than one-third. Some analysts believe that the unpopularity of Facebook in Japan is mainly due to its late entry into the market since earlier entrant and large incumbent like Mixi, has already grasped nearly 80% of the market share. But, still this could not explain the growth discrepancies between Facebook and Twitter. Facebook Japan was launched in May 2008, while the Japanese version of twitter was introduced only a month earlier. How could the difference be so large? Moreover, according to the latest Alexa ranking of top sites in Japan, Facebook is high on top 10, while twitter and mixi are ranked 13 and 14, respectively. How could this happen at the same time when facebook users in Japan are only one-third of the twitter users? It might be the case that the English version of facebook is far more popular in Japan than its Japanese version, and even twitter.

Others argue the unpopularity of Facebook in Japan is because of the real name policy. But how big is this issue? Are there any other factors that may better explain the facebook problem in Japan? Is it due to any further risks of using facebook in Japan, or is it because of a deep culture clash? Here is a post which offers a somewhat more in-depth look.

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