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International as a Social Networking Niche


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April 05, 2007

International as a Social Networking Niche

Heather Green

I know I am about the bring the wrath of the rest of the world down upon me, but what struck me yesterday in speaking with hi5, the social networking service, is how it has pursued the international market as a niche strategy.

In the early days of the service, the company execs decided deliberately to be open to folks outside the U.S. and even offer the service in other languages. This is very different from services, such as MySpace, which would limit certain domain addresses or slow down the service for certain domain addresses, according to an early VC investor at Redpoint. Why? Because the traffic was expensive and the U.S. online ad market dwarfs the rest of the world.

hi5 made the bet that overtime it would be able to attract advertisers and that has paid off. With 28 million unique visitors last month, the service isn't as big as MySpace. But it is profitable and it's benefiting from the phenomenon of social networking services rocketing quickly into the top 100 sites in markets around the world, and attracting advertisers. While the markets aren't as big, says hi5 founder Ramu Yalamanchi, the growth is subtantial. Around 80% of its traffic is from outside the U.S., though the strongest ad markets for it are still in the U.S, the U.K. and Canada, he says.

Over time, in aggregate as these markets continue to grow, this stops being a niche market. But even in the U.S. with one of the most mature and biggest ad market, it has been a struggle for social networks to attract advertising, though they are figuring it out now. But as Yalamanchi pointed out, what really helped hi5 speed up the time it takes to bring in advertisers is the fact that social networks did jump so quickly into the top 100 lists around the world.

11:03 AM

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heather - not surprising at all, actually. one of the fasting-growing communities in the network of sites driven by haystack is based around the mediterranean rim, and visible here:

http://haystack.cerado.com/yasmin

people need to connect, regardless of their home geography...

Posted by: christopher carfi at April 5, 2007 01:48 PM

Hi5 is great and brings a new audience to the table, and you can still customize using sites like webfetti.com

Hey I found this awesome layout site, its still in beta but when it launches its going to be awesome! WEBFETTI.com check it out with this login

LOGIN :FETTI PW: 1sc00l07

Posted by: layoutfreak at April 5, 2007 03:34 PM

now hi5 really rocks .. there are so many hi5 recources coming up like http://hi5.cyarena.com , which provides free hi5 graphics comment for hi5 users.

Posted by: n3o at April 10, 2007 03:53 PM


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