Facebook's journey into the East

By Harsha Sharma

Facebook grows and makes money

With news that Facebook has turned a profit sooner than expected, the social network giant is turning its eyes to new markets.

How it can replicate its global success in East Asia was top of the agenda at the latest Facebook Developers' Garage in Boston, Massachusetts.

With over 300 million monthly active users around the world, Facebook has achieved staggering success in global online social networking.

However, the East Asian social networking market is proving elusive.

Instead of using Facebook, internet users in East Asia prefer their own local social networks - Cyworld in South Korea, Mixi in Japan and in China it is RenRen (formerly Xiaonei).

These sites are not only major communication tools but also have serious money-making models, something which makes cracking the market even more attractive to Facebook.

According to Alan Hshieh, a human-computer interaction expert from Harvard University and host of the Facebook Developers' event, Facebook is falling down in a number of key areas.

"The failures fall into three groups: platform functionality, dissimilar internet interaction and cultural differences. The East Asian users know what they like and already have it; there is no incentive to try Facebook with its one size fits all approach."

Censorship

Facebook's struggle in East Asia is nowhere more apparent than in China, where the site battles cloning and censorship.

It seems to be the butt of jokes there as it is called "fei si bu ke"; the name sounds like a phrase which is translated as "doomed to die".

Net companies face unique challenges in China

"While other Asian nations such as Indonesia and Vietnam are seeing phenomenal growth of over 2,000 percent, Facebook's year-on-year growth in China is negative," said Jessica Lee of Silicon Valley-based blog Inside Facebook.

The obvious explanation is political censorship. Facebook was added to the growing number of foreign web services banned after political unrest in the western region of the Xinjiang province in China.

However, Ms Lee has followed Facebook's attempts to crack China and believes the main issues are easy for the social networking site to rectify.

"Because competition is so fierce in China, even among clones, the sites that make it aren't just cloning, they're also innovating - particularly with virtual goods," she said.

"Timing is also an issue as translating into Chinese only occurred in spring 2008, after local Chinese social networking sites had already started gaining momentum."

Communication tool

Japan's social networking market and its main player Mixi highlight the cultural differences Facebook has to deal with.

Mixi puts emphasis on communication

"Mixi is a communication service; Mixi users manage a list of friends and acquaintances on a site for one-to-one /one-to-many communication with diary, community, message and the other communication functions," explained Masashi Tokuda of Mixi.

It is interesting to see how much of an emphasis Mixi puts on its site as being a tool for pure communication.

"Mixi is a social utility and Facebook is more of social website," said Mr Hshieh.

"When you look at Mixi profiles, most users don't even have a profile picture and only 7% of users show any of their content outside, even to their friends."

"Facebook lets people create a bold news broadcast about themselves, whereas Japanese and Korean users just want to connect with each other."

Aesthetics

South Korea is another of the heavily social networking hubs in East Asia. Its local Facebook rival Cyworld has made it virtually impossible for the western site to make an entrance.

Cyworld boasts an impressive 24 million registered members and about 10 million users visit the site each week.

It makes good use of mobile integration and has successfully kept ahead of the game by locking in their users through integration with NateOn - South Korea's number one instant messaging service with about five times more users than MSN messenger.

Cyworld has 24 million regisitered users

"Western sites are often perceived to be too function-orientated and somewhat crass to Korean users who are accustomed to a 'cute' and 'decorative' user interface," explained Dyne Lee, assistant manager of Cyworld.

It is also a good example of the money making abilities of East Asian social network sites. Cyworld provides a "Minihompy" - a personal profile that can be decorated with purchased digital items. About 70bn won (£35m) in these digital items is purchased each year on the site.

Beauram Hur is a student at Stanford University, originally from South Korea. She has accounts with both Cyworld and Facebook.

"Cyworld has many applications that allow you to decorate your Minihompy: music, skin [background], initials [mobile icons on your page], etc. This allows everyone's Minihompy to be unique yet similar which is important for Koreans. Facebook is too rigid."

Mr Hshieh thinks applications will be key to Facebook's success in the region.

"Developers are versatile; Facebook moves slowly as it is a huge platform but developers have applications that they can create according to exactly what users want," he said.

"They hold the key to making users interested in Facebook and expanding the one-size-fits-all approach."

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