Facebook's Local Battle Abroad

Despite Facebook’s continued growth abroad, attracting over 450,000 new users a day, the site is facing some challenges in expanding in certain markets. Looking at our Facebook demographics tool, we’ve found a number of countries with decreasing activity on Facebook: Bolivia, Colombia, Costa Rica, Egypt, Ireland, Kenya, Luxembourg, the Netherlands, and a few others.

While the vast majority of countries are providing rapid growth for Facebook, the company is finding it increasingly challenging to fight against local social networks as BusinessWeek writes this morning. In Holland, Hyves is proving to be a formidable opponent. In Germany, Facebook is facing hurdles from StudiVZ. As with all social networks, users tend to go where their friends are and currently in many countries, users’ friends are on local social networks, not Facebook.

So what will drive these users to make the switch to Facebook? There are a number of things that will convert the users and there are numerous types of strategies that could be used. Facebook has already attempted to use street marketing in Germany which has encountered mixed results. Site usage in Germany continues to increase but traffic is still far behind StudiVZ.

The biggest drive of new user adoption to Facebook will most likely be applications that have been translated into a site’s native language. With the addition of Facebook’s application email invite feature and the extension of Facebook’s translation tool to applications, it’s clear that Facebook is banking on application developers to drive new user adoption.

It’s a smart strategy. The collective force of the hundreds of thousands of Facebook developers will provide more promotional power than Facebook could ever drive as an individual organization. Give developers an incentive to create popular applications and they’ll take care of the promotions. So far advertising revenue has been a solid enough incentive.

I regularly argue that Facebook should provide more incentives but currently the company appears satisfied with adding more than 450,000 users a day. I would be satisfied as well! What strategies do you think Facebook should use for expanding into countries with dominant local social networks?