A View from Jessica Leber
Will Facebook Make as Much From its Next Billion Users?
The company marked one billion accounts today, but revenue from future users in emerging markets is less certain.
Facebook’s next one billion users, should it reach that mark, will use the site quite differently than its first billion–a milestone the company celebrated today.
Many will join Facebook from emerging markets such as Brazil, India, and Indonesia, which have been among the company’s fastest-growing countries in the past few months. They will access the social network primarily from their phones, as mobile Internet access grows in Africa and Asia. Maybe they will come from China, should CEO Mark Zuckerberg successfully devise a “long-term” strategy for Facebook to enter that giant market, where it is currently blocked (a Businessweek interview with Zuckerberg addresses this today).
These growth trends highlight the importance of Facebook’s quest to bring in more revenue for each of its existing users. If the company is struggling to please investors now with its per-user revenue (see “Facebook’s Earnings Report Underscores Its Challenges”), it will have to make major changes as it expands in countries where online advertising and commerce are less developed markets, and where mobile devices–an area in which Facebook is already struggling to bring in revenue–represent the population’s primary way of getting online.
Facebook will hold its second-ever earnings call with investors on October 23, reporting how it did in the July-September period. So while today is a well-deserved moment for the company to celebrate its remarkable growth over the last eight years, I suspect in another two weeks we’ll have some better data points about how it handle its march toward two billion users.
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