The world's largest online social network is also the fastest growing in this country. But Facebook seems like it is turning its back on one of the most attractive online communities on the planet.
By Ralphe Manzoni Jr. and Bruno Galo
The young founder of Facebook, 25 year-old Mark Zuckerberg, visited Brazil in August of 2009. He met with bloggers, launched an award for developers, talked with the press, but didn't make any important announcements. His tour through the country, however, resulted in a significant market growth. The number of Brazilians on Facebook jumped from 4.2 million to 8 million people in February of 2010.
Its main competitors, Orkut and Twitter, were stagnant in the same period. Brazil has proportionately more people accessing online communities than any country in the world, according to Nielsen Online. Of every 100 people who surf the Internet, 86 spend time in online communities. In second place Spain, only 77 people go to such communities.
In the US, the number is 74. "We won't be able to accomplish our mission if we don't succeed in Brazil", said the entrepreneur, whose fortune is worth an estimated US$ 4 billion, during his time in the country. But don't be fooled by Zuckerberg's statements. Facebook doesn't even have an office in Brazil. Even more: its advertisements are sold by a competitor.
And there is no sign that this will change in the near future. With more than 400 million registered users in the world, why does Facebook, which is the largest online community on the planet, still ignore one of the most attractive social networking markets?
The quick answer is Orkut. Google's site didn't catch on anywhere, except Brazil and India. Of every 100 people that access social networks in the country, 73 say Orkut is their favorite. It's a big barrier to entry for Zuckerberg's company. But that barrier is slowly being broken.
Google's online community is stagnant (see graph above), albeit at very high levels. Facebook, on the other hand, has been growing every month and should soon surpass the great phenomenon of 2009: Twitter. "Facebook is a great business that generates sales and publicity for companies and products. The only thing lacking now is for it to become profitable," said Luli Radfahrer, professor of digital communication at USP (University of Sao Paulo).
There is also another problem in Brazil. The way the site makes money is basically through online advertisements. And the company that sells advertisements in Brazil is .FOX Networks (pronounced "dot FOX", one of the largest international ad networks, is the online division of FOX International Channels), a News Corp. company that belongs to media mogul Rupert Murdoch. For those that don't recall, Murdoch is the owner of MySpace, another social network and Facebook competitor. Around here, .FOX Networks sells both of them. But it created a separate business unit to sell MySpace.
In the US, companies like Burger King, Honda, Johnson & Johnson and Unilever invest in the site. According to Facebook, 80% of the largest North American advertisers have already done some sort of promotional activity. "Facebook wants to build a large user base and afterwards "sell" assets related to this base," says Marcelo Coutinho, Ibope (Brazilian Institute of Public Opinion and Statistic) consultant and professor at Fundação Getulio Vargas in Sao Paulo. "They can be advertisements, databases of people interested in goods or services, or information on people's online behavior."
The only indication that Facebook's stance may change is a classified ad in the Career and Employment section of its site which states that it plans to hire a Brazil business manager. There is no date for when this will happen. "The contract for the job is from 6 to 12 months", says the statement. Last week, Facebook announced that it will open its first office in Asia.
India, where Orkut is the leader, was the chosen site. Internationally, the social network is in Dublin (Ireland), Milan (Italy), Paris (France), Stockholm (Sweden), Sydney (Australia) and Toronto (Canada). Aren't they missing an office in Latin America?
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