An un-American feel aids expanding US Web firms
NEW YORK (AP) _ AOL splashes images of Bollywood celebrities on its new home page for India. MySpace accepts sign-ups from mobile phones in Japan. Google departs from its customarily spartan home page and peppers its Korean site with colorful, animated icons.
As major U.S. Internet companies stake their ground abroad in anticipation of the next billion people coming online – and the advertising revenue they might generate – the flags they are planting aren’t the Stars and Stripes.
Companies are trying to expand globally without seeming to, designing market-specific services with customized features that reflect differences in connection speeds, payment options and attitudes toward sex or violence.
The stakes are high as the United States faces a weakening economy and a slowing of online ad growth.
And the opportunities are large. People in two populous countries, India and China, are just getting online. The research firm IDC projects worldwide Internet ad spending at nearly $107 billion in 2011, compared with $65 billion this year.
But getting it right will be tough. American companies that merely translate their U.S.-focused sites into other languages risk losing to homegrown businesses that can better respond to cultural nuances.
Google Inc. discovered that in South Korea and China, where it initially held its minimalist approach, only to see local rivals thrive by acknowledging their users’ preference for sites rich with entertainment and visual complexity.
“A lot of times, the U.S. companies, because they were successful in the U.S., they tend to repeat their current business models,” said Tian X. Hou, a Pali Research analyst who follows China. “Most of the time, that doesn’t work.”
Cho Ko-un, 29, a graduate student sitting in a cybercafe in Seoul, South Korea, finds Google good for English and academic research, but local portals like Naver and Daum better for Korean-language information. Naver, for instance, has forums for users to answer one another’s questions, which proved helpful when Koreans couldn’t find a site in their native tongue.
“I feel amazed and surprised when the exact question I am trying to ask … the proper answer on that is already uploaded,” said Kim Seung-ho, a 32-year-old government employee.
Tom Anderson, co-founder of MySpace, said dominance in one market means nothing as the company expands to nearly 30 other countries and regions. He said local incumbents have a key advantage because “it’s difficult to get people to change their behavior.”
MySpace is nonetheless trying.
In South Korea, MySpace offers an exclusive “minilog” feature for youths to jot down everyday thoughts and feelings. In mobile-heavy Japan, people can sign up for an account directly from a phone; elsewhere, you need a desktop computer. MySpace tweaked its Chinese site to generate new windows with every click, in deference to local user preferences.
The News Corp.-owned company also is exploring low-bandwidth versions – perhaps with fewer graphics or less audio – for India and Latin America, where connection speeds tend to be slower.
AOL, meanwhile, has launched about two dozen international sites over the past 18 months. As the one-time Internet access powerhouse transforms itself into an advertising business, executives decided to push into several emerging markets that they knew wouldn’t pay off for another few years.
“Our goal is to plant the flag, to be present, said Maneesh Dhir, AOL’s India-based international chief. “Then you work to grow that business.”
In each market, AOL partners with local content providers.
The Indian portal, for instance, is heavy on Bollywood films, covering their stars as fiercely as American sites follow Lindsay Lohan. Instead of baseball, the Indian portal covers cricket, with schedules, team profiles and an online fantasy game.
AOL, a unit of Time Warner Inc., also customized its popular AIM instant-messaging service for India and other markets with heavy usage of text messaging on cell phones. Messages sent over AIM are automatically converted into phone texts, and vice versa.
And AOL’s channel for men is far edgier in Australia than in Asia or the United States, at one point featuring a photo gallery of a New Zealand rugby game with full frontal nudity.
Microsoft Corp. has more than 80 people worldwide tasked with making sure its products and services do not stereotype, offend local sensibilities or prove irrelevant in a particular culture. Microsoft’s instant-messaging product, for example, varies icons and emoticons to reflect flowers, animals and characters popular in each market.
Google has had a different challenge.
With a dearth of Arabic Web sites, Google had to find a way to persuade Arabic speakers that the Web is worth exploring. So it developed a system for automatically translating an Arabic user’s search terms into English, checking its English index for matches and translating relevant Web sites back into Arabic for Mideast markets.
To take on China and Korea, where it trails rivals, the normally sparse Google site for those countries now displays icons that jump as users move the mouse. In China, Google also took the much-criticized step of filtering its results to avoid revealing search results blocked by the government.
But Baidu is still the Chinese search leader, thanks to its willingness to add music video and other entertainment features.
“I do think local companies have an edge over international companies because local companies start with Chinese services, whereas international companies have to follow their overarching goal and can’t easily adapt to Chinese needs,” said Zhu Shuang, 27, who works at a Shanghai wireless technology company, mInfo Ltd.
Like other U.S. companies, Google is finding it cannot afford to ignore emerging markets. This year, Google started getting more than half its revenue abroad.
Analyst Greg Sterling of Sterling Market Intelligence said many companies have stepped up international ambitions “to insulate themselves as much as possible” from the weakening U.S. economy.
E-retailer Amazon.com Inc. and auctioneer eBay Inc. were among the pioneers in expanding abroad, gaining dominance elsewhere over the past decade by buying local companies that knew the markets already, said Anette Schaefer, a Europe-based director at the Yankee Group.
Pali’s Hou said Microsoft’s MSN also has made inroads in China, thanks to its highly local staff in touch with Chinese affinity for entertainment news.
But expansion hasn’t always been smooth. Though strong elsewhere, eBay failed to gain traction in Japan and pulled out in 2002. Among its missteps: It insisted on credit cards in a largely cash-based society. EBay is now re-entering Japan by teaming up with auction leader Yahoo Japan Corp., which itself is Yahoo Inc.’s joint venture with a leading Japanese company, Softbank Corp.
Other companies simply translated their sites, and one site that no longer exists displayed products available only in the United States, making the site feel foreign to locals, said Matthias Caesar, German-based board member for the Globalization and Localization Association, whose members provide language and other consulting services.
U.S. companies do have key advantages. They have technical know-how, financial muscle and global reach. MySpace and Facebook, for example, let friends communicate worldwide, even if each logs on from a locally customized home page.
And oddly, a few U.S. companies have found their social networks more popular abroad, including Google’s Orkut in Brazil, AOL’s Bebo in Britain and Friendster in the Philippines.
But U.S. companies are often hampered by global codes of conduct.
Take nudity. Many Mideast cultures are averse to displaying women’s skin, while Europeans are far more tolerant of public nudity than Americans. A U.S. company trying to impose its standards for user-submitted content elsewhere risks complaints of banning too much or too little, yet it wants uniform policies because the Internet crosses borders.
“Creating a national company is like rocket science,” said John Strand of Strand Consulting in Denmark. “But creating an international company is like proton physics.”