Global Economics

Hey, America, We Have Our Own Facebooks


Facebook and MySpace may lead in the U.S., but top social networking sites overseas include Russia's Vkontakte, Belgium's Netlog—and even Friendster

It was launched as a network for musicians, but since Habbo's birth in 2000 the social networking site operated by Finnish company Sulake has moved beyond just connecting old friends. Using avatars, or personalized cartoon-like characters for role playing, users can visit virtual hotels and make new friends with people who may live right down the street. It's this local touch and sense of individuality that's attracting participants to smaller and lesser-known social networks.

While Facebook, MySpace (NWS), and Twitter continue to dominate social media in the U.S. and some other countries, the global scene tells a different story. Data-monitoring firm comScore (SCOR) reports that in Germany, Russia, China, and Japan, the most visited social networking site isn't Facebook but homegrown rivals.

"In certain countries the communities are based on the local language and personal style of networking rather than what is the big American trend," says Drew Benvie, managing director of online marketing agency 33 Digital. "And once a community is gathered around a site, it's very difficult to dislodge it." With 35 million users, Russia's most popular social network, VKontakte—Russian for "in touch"—has become so ubiquitous that local companies often send job offers through the site.

U.S. Rivals Duke It Out Abroad

In other countries where U.S. trends carry more sway, such as France, Italy, and Spain, Facebook may be at the top but local sites are gaining ground. Belgian-based site Netlog has 42 million users around the world and, according to comScore, is the second-most-visited site in its home country—as well as in Austria and Switzerland—behind Facebook. The American rival takes such local competitors seriously: Late last year it filed a lawsuit against Berlin-based studiVZ for allegedly plagiarizing two of Facebook's most famous features: a wall for public messages and "poking" other members. (A German court threw out the case last month.) StudiVZ is the most visited social networking site in Germany, where Facebook lags at No. 4, according to comScore.

Not all of Facebook's rivals were born overseas: Some have migrated from the U.S. The most famous example is San Francisco-based Friendster, which was a social networking pioneer in the U.S. when it launched in 2002 but then wilted as MySpace and Facebook took off. Far from disappearing, Friendster found new markets abroad and now draws 90% of its traffic from Asia. With 105 million users, it remains one of the world's largest social networks.

Google's (GOOG) Orkut similarly started in the U.S. but found greater success elsewhere, especially in India and Brazil, the latter of which now accounts for more than half its users. To solidify its global position, Google moved Orkut's head office to Brazil last year. ComScore analyst Jamie Gavin says social networking sites have a "dot-com mentality—build up a following as quickly as you can." Once a community is established online, it's hard for users to switch.

Different Networks for Different Things

Still, analysts say specialized sites will continue to find communities of enthusiastic members. Consider Habbo, which is a hybrid virtual world and social networking site aimed at teenagers. Habbo lets users meet people with similar interests through online characters they can personalize. To stay ahead of rivals, owner Sulake involves users in decision-making. "We don't get complacent, we have daily reviews of what is and isn't working for users based on their comments," says Oisin Lunny, who oversees Habbo's operations in Britain and Ireland.

Having a Habbo or other social networking account doesn't mean those same users won't also be on Facebook or Twitter. "There's a winner-take-all mentality, but people use different networks for different things," says analyst Alex Burmaster of researcher Nielsen. He says that while Facebook has reached a footprint that few others can match, there will always be people who don't want to be using what everyone else is. "It's all about moving to the next cool thing."

For an introduction to some of the world's most popular non-Facebook social networks, check out our slide show.


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