Google's Orkut: A World of Ambition

Seizing on Orkut's momentum in Asia and Latin America, Google moves to revamp its social networking site and take aim at Facebook and MySpace

by Olga Kharif

If it's not about MySpace and Facebook, then the breathless buzz that surrounds online social networking often gravitates to names such as Bebo and CyWorld. Then there's Orkut. Though early to market, the Google-owned social network hasn't seemed to gain traction anywhere but Brazil. But that laggard status may be fading, thanks to a traffic surge in Asia. And now Google (GOOG) appears determined to eliminate its weakness in social networking, an Achilles' heel that detracts from its dominance in Web search and online ads.

Though MySpace still gets four times as much traffic globally, Orkut recently pushed past the News Corp. (NWS) subsidiary in the Asia Pacific region. Orkut's following in that market, which includes China and Japan, has nearly tripled, to roughly 11 million visitors a month, over the past year, according to the consultancy comScore (SCOR). MySpace, by contrast, has been drawing between 9 million and 10 million visitors in recent months.

Meanwhile, Orkut's usage in Latin America has continued to climb: In August, it received 12.4 million unique visitors from that region, double the Latin American traffic of MySpace and Facebook combined. "Now everybody's got Orkut, even people who don't have their own computer," says 15-year-old Ian Quinonez Gaspar, who lives in São Paulo, Brazil, and has more than 700 friends links.

Web Site Makeover

But that's where the high-fives end for Orkut. Beyond Asia and Latin America, which account for nearly all of Orkut's 24.6 million monthly users, the site's traffic remains simply anemic—totaling just 600,000 in North America and about 1.2 million in Europe, and not growing very fast.

Still, while it's unclear whether its overseas momentum is the inspiration, Google is starting to throw more resources behind social networking. The company recently gave Orkut's site a makeover so it looks more Google-like. It's also launched the site in more languages, including Hindi and Bengali (Orkut is particularly popular in India and Bangladesh). At the same time, Google has been incorporating more social networking features into Gmail and its online Calendar service. "The property has long been neglected. But now Google has recognized the social networking phenomenon is very profound and powerful," says Greg Sterling, the founding principal at consultancy Sterling Market Intelligence.

The next big step, expected in November, will be to open Orkut's software code to outside programmers, a plan first disclosed by Michael Arrington on his TechCrunch blog. BusinessWeek.com has learned that third-party developers based in India have been told that the code, known to developers as an Application Programming Interface (API), would be made available around Nov. 5. While Google declined to confirm or deny these reports, the company did confirm earlier this year it was considering opening up Orkut's code (BusinessWeek, 2/13/07).

A Step Further than Facebook

Once the code is available, independent developers will be able to create a plethora of new applications for Orkut that could boost its usage, judging from the experience at Facebook. Developers have already written more than 3,000 applications for Facebook's pages since that site released its code in May. These "widgets," including a hit called Slide that lets Facebook users embed slide shows in their profiles, are considered key drivers behind a 28% jump in the site's user base from May to August. "Facebook created this tremendous momentum and energy around this idea," says John Musser, who runs ProgrammableWeb.com, a developer news and API aggregation site. "Other players can't stand by." That includes Orkut.