Global Reach - Game of Risk Among Developing Nations

As a follow up to the US reach reported by the New York Times, I was curious about the global reach of Yahoo, Google, and Microsoft. Note below that AOL is invisible in developing countries.

I assume that countries in Western Europe have similar high level trends when compared to the US, but developing countries deliver the highest growth. Whereas developed countries depend on mindshare growth, developing countries have the compound growth of unique users and pages per user.

Data Collection Problem

The available metrics services in the US provide a reasonably comprehensive view of Internet use. Statistically allocated Neilsen, comScore boards; Alexa, compete, and quantcast opt-in volunteers; piece-meal reports from adNets; and SEC reporting creates an implicit system of check and balances against imperfections in any data system. 

International data presents a challenge. 

• Neilsen and comScore don't provide services in developing countries. 
• Alexa, compete, and quantcast depend on savvy Internet users. Developing countries have fewer savvy users. 
• Countries can block monitoring.
• Fewer ads are sold. Thus, adNets understate use.
  

Even Yahoo and Google have incomplete data - since they don't dominate many emerging markets.

Alexa Results in Developing Markets

Here is a quick overview of the top sites (global rank) and user saturation/page views in key countries.

• China: Baidu (19), QQ (37), sina.com.cn (61), 51.com, google.cn - crossing chasm
  
• India: Yahoo, Google.co.in (63), orkut.com, rediff.com (163), indiatimes.com (581) - emerging growth
• Indonesia: Yahoo, Friendster, Google.co.id (168), kasus.us - emerging growth
• Japan: Yahoo.co.jp (32), FC2(81), Google.co.jp(99), Youtube, Mixi.jp - saturated/matured - provided for rank comparison.
• Vietnam: Yahoo.com, Google.co.vn (72), vnexpress.net (107), dantri.com.vn, zing.vn - emerging growth

• Brazil: orkut, Google, live, uol.com.br (51), youtube, google, yahoo, globo.com (70) - crossing chasm
• Mexico: google.com.mx (26), live, youtube, metroflog.com (42), hi5 - crossed chasm/high growth
• Venezuela: google.com.ve (44), live, youtube, hi5, yahoo - emerging growth
• Russia: vkontakte.ru (36), mail.ru (37), odnoklassniki.ru (40), yandex.ru, rambler.ru - emerging growth

Understating Internet Use

These and other developing countries have more than 80% of the population; and account for roughly 300 million of 1 billion users. As 20% of these populations achieve middle-class status, the Internet user base will grow to 1.5 billion - near term. In China, nearly 20% are already middle-class.

Alexa undercounts users in several ways.

• Savvy, technical users volunteer to download. Developing country users are less technical.
• Users depend on Internet cafes. This undercounts unique users.
• More people share computers at home, work, and school.
• Many use iPhone-like products. Mobile phone can be the only communication gadget; rates are generally lower; and coverage is better. Already China leads the world in cell phone use. Alexa does not count this use.

Alexa over-counts the share of Google, Yahoo, and western brands. Those who know Alexa are more likely to use global brands. In reality, portals are controlled by the local ISPs. That use may not be visible to western brands.

Conclusion

With half the Internet market at stake, the battle looms. Use the above data with caution. It's a one-dimensional first look with no reliable second source.

MySpace Offers Site Designed for Korea

from NYT > Technology
Chris DeWolfe, co-founder and chief executive of MySpace, said the company’s Korean-language site caters to local cultural habits.

Feld: Most Traffic Stats Are BullSh**, Including Feedburner

from Silicon Alley Insider by Henry Blodget

Entrepreneur and investor Brad Feld calls b.s. on the widgets adorning many popular blogs that quietly brag about how many "readers" the blogs have. For example, Brad says the majority of his 100,000+ Feedburner "readers" are actually an automated blog aggregator called BlogRovR. Brad also tees off on the unreliability of other metrics that folks love to throw around, including many that under-report readership. 

Google: We're Going to Crush Baidu in China. We Think.

from Silicon Alley Insider by Henry Blodget

Google (GOOG) is the undisputed champ of search just about everywhere in the world except Russia and China (anywhere else? Please let us know). In the latter, Google has surged ahead of Yahoo China and other competitors but is still getting clobbered by Baidu (BIDU), which has also been a NASDAQ moonrocket.

But getting its head handed to it in China hasn't thwarted Google's ambitions there. On the contrary, according to the WSJ, Eric Schmidt said last year that Google would be the China market leader within five years. At a conference in Boao, China, this week, the president of Google China, Kai-Fu Lee, appeared to agree with Eric--sort of.

"Certainly, we would like to aspire to be a market leader in five years," Mr. Lee said Monday on the sidelines of the Boao Forum for Asia.

Google accounted for 26% of China's Internet-search revenue in the fourth quarter, up from 17% a year earlier, according to Beijing research firm Analysys International. Market leader Baidu.com's share of the market rose to 60% from 58%.

Many Internet users in China are more familiar with Baidu, which started earlier in the country and which attracts users in significant part by facilitating easy access to free music.

"Gaining share against a well-established, supermajority competitor is a difficult proposition because there is a certain critical mass, economy of scale and word-of-mouth effect that one has to overcome," Mr. Lee said.

Google certainly would know. Still, Google's market share gains against Baidu are impressive: In the US, since Google entered the market, no one has ever gained that much share against it. In fact, since Google entered the market, almost every other player has lost share, every quarter, for years. So perhaps Eric's not hallucinating, But it would seem to be Baidu's game to lose.

The WSJ adds:

Google also is exploring investments in Chinese companies that focus on social networking and mobile Internet as part of its strategy to expand in China, a burgeoning market that analysts estimate may already exceed the U.S. in the number of Internet users.

In China, Google has invested in Tianya.cn, a social-networking Web site, and in Xunlei Network Technology Co., a provider of video and game downloads, for undisclosed amounts.

As Economy Flags, Will U.S. Shops Look to Europe?

from ClickZ News Blog

Interactive budgets are growing way faster in Europe than they are in the U.S. ZenithOptimedia forecasts spending will accelerate approximately 95 percent in Western Europe between 2007 and 2010, compared with 40 percent here. Central and Eastern European ad spending will grow even faster.

So it's ever more important for U.S. based agencies to develop strong footholds there, especially as the economy flags this side of the Atlantic.

That's just what iCrossing's done with the acquisition of Germany-based 3GNet, whose clients have included eBay and ESPRIT, and O2 Germany. The agency, which offers paid search, SEO and affiliate marketing services, will be iCrossing's first outpost in mainland Europe. It already has a presence in the U.K.

3GNet was founded in 1999. Its 70-member team brings iCrossing's headcount to 620 in 15 offices. “Their understanding of the European search market, particularly in leveraging affiliates, as well as their CEO Jeffrey Herzog.