Facebook, poised to launch its initial public offering, is the social media king of the U.S. and Europe
But the West is approaching saturation point and Facebook is looking to emerging markets
iCrossing calculations have Facebook hitting 1 billion active users around August this year
The huge majority of these will come from emerging markets, iCrossing says
Facebook, which launched its blockbuster initial public offering Wednesday, is the undisputed social media king of the U.S. and Europe.
But as the West approaches saturation point with the site, Facebook is looking to emerging markets like Brazil and India to fuel its next stage of growth.
The company seeks to raise up to $5 billion, according to documents filed Wednesday. That represents the largest global IPO ever by an Internet-focused company, according to data from Dealogic. Google’s $1.9 billion debut is currently the largest U.S. Internet IPO.
Once Facebook starts trading, experts say it could be valued at between $75 billion and $100 billion. The site now has more than 800 million active users, with the bulk of those in the U.S. However, its growth in early adopter countries has stuttered.
Is Facebook growth stalling in North America?
Growth is taking off in places like countries India, Brazil, Peru, Mexico and Indonesia. Gregory Lyons, research and insight manager at digital marketing agency iCrossing, calculates Facebook will hit 1 billion active users around August this year, with the majority of those coming from emerging markets.
Brazil, particularly, is a “ripe market,” Lyons said. India’s sheer size also makes it a prime target. According to iCrossing, India has grown from 22 million users to 36 million in the last nine months, while Brazil has gone from 13 million to 30 million.
According to analytics company comScore, Facebook last year blasted past Google’s Orkut in Brazil as the leading social network destination. ComScore’s report showed Facebook attracted 36.1 million visitors in December – an increase of 192% – to overtake Orkut.
Facebook is also making efforts to capitalize on emerging markets, with partnerships such as that with MediaTek, which makes software for low-end phones. The partnership should assist Facebook in tapping low-income groups in markets such as India.
But even as it taps these markets, Facebook faces challenges closer to home. Google’s social network, Google+, now has more than 90 million registered users, according to a presentation from its chief executive officer Larry Page last month. That more than doubles the 40 million it reported in October.
According to Lyons, Google is likely to be a serious challenge to Facebook. Due to the internet giant’s existing reach, “they could almost force their way in,” he said. “If anyone can do it, Google can.”