Facebook's Winning Traffic

The article highlights Facebook's remarkable growth, particularly its expansion beyond US borders. Several sources, including TechCrunch, point to the platform's strategic approach of enabling users to translate the site, allowing it to quickly adapt to diverse markets.

• This translation strategy facilitated rapid growth and contributed to Facebook's position as the world's fastest-growing social network.
• While Facebook enjoys impressive traffic, the article underscores the challenge of monetizing this global audience, particularly international users.

The Challenges of International User Monetization

The article dives into the complexities of monetizing international users, focusing on key factors contributing to the difficulty:

• Payment Processing: Limited credit card adoption, fraud concerns, and high transaction costs pose significant hurdles for direct response advertising.
• Cultural and Linguistic Barriers: Differences in language, culture, and geography can hinder effective advertising campaigns, resulting in lower conversion rates and difficulties in delivering goods and services.
• Brand Advertising Focus: Many brand advertisers prioritize influencing US spending or work with US-based agencies and multinational companies, making it challenging for social networks to attract substantial brand advertising dollars unless they achieve significant scale in those markets.

Facebook's Path to Monetization

The author suggests that Facebook acknowledges the difficulties of monetizing international users and is likely exploring new strategies to generate revenue. Possible approaches include:

• Expanding Beacon: Building on their existing Beacon platform, Facebook might explore new applications to monetize user data and interactions.
• Monetizing User Data: Sharing or syndicating user newsfeeds could present opportunities for revenue generation.
• Integrating Ads into Facebook Connect: Integrating advertising within Facebook Connect could offer a unique monetization avenue.

Traditional Monetization Strategies

The author also explores more conventional monetization methods that Facebook might consider:

• Creating Contextual Sections: Developing dedicated sections for Games, Music, and TV could attract advertisers seeking targeted audiences.
• Introducing Advertiser-Friendly Units: Shifting from smaller proprietary ad units to larger, more visible leaderboards might appeal to advertisers.
• Allowing Homepage Takeovers: Granting brands the opportunity to take over the Facebook homepage could be a lucrative advertising option.

MySpace's Advantage

The article contrasts Facebook's monetization challenges with MySpace's apparent advantage due to its affiliation with FOX.

MySpace benefits from access to FOX's vast advertising sales team, which opens doors to significant brand advertising dollars. This network effect allows MySpace to offer valuable bundled advertising opportunities, potentially attracting brands seeking to reach millions of users through FOX's diverse entertainment properties.

Diverging Paths for Facebook and MySpace

The article concludes that both Facebook and MySpace are on distinct paths to monetization. While Facebook may encounter difficulties in maximizing revenue from its international user base, MySpace's connection with FOX provides a powerful advantage in attracting brand advertising. Ultimately, the companies' diverging goals and strategies will shape their future success in the social media landscape.