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Facebook finds Asia a challenge

Facebook has yet to make inroads into the Asian market.

Facebook Asia marketEnlarge
This map on a page from the Facebook social network site displays friendships as lights on a deep blue background. The eastern half of the United States and Europe shine the brightest, while China, Russia and central Africa, where Facebook has little presence, are mainly dark. But data shows Facebook user growth rate is increasing in Africa. (Karen Bleier/AFP/Getty Images)

To reach the goal of adding all two billion internet users to its website, Facebook would have to expand beyond the 845 million it has already collected. Nearly 60 percent of those who still don’t use Facebook live in Asia, according to Reuters.

The major obstacle for Facebook in Asia has been China’s block on access, leaving China’s 500 million internet users to use locally based social networking sites, said the Wall Street Journal. News of Facebook’s initial public offering spurred an increase in stock prices among social media companies in China, including Renren Inc., which climbed 33%.

Sina Corp., which runs a microblogging site called Weibo, saw its stock prices rise 13%. The company’s chief financial officer, Herman Yu, told the Wall Street Journal, “A successful Facebook IPO may further heighten investor's interest in social media,” and “open platform, social advertising and e-commerce.”

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CNET noted that a majority of Facebook’s revenue still comes from the domestic market. “Last year, 56 percent of its revenue came from the U.S., although that was down from 62 percent in 2010. Outside of the U.S., the company said most of its revenue comes from Western Europe, Canada, and Australia,” said CNET.

According to Deal Journal, “Facebook’s penetration rate in India is about 20% to 30%, better than the less 15% rate in markets like Japan, Russia and South Korea, but still far less than its U.S. and the U.K. rate of about 60%.” With the Chinese market largely unavailable, Facebook plans to focus on India, Japan and South Korea, but it will face local competition from the likes of Cyworld in Korea, Mixi in Japan and Google’s Orkut in India. 

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