Does Rest Of World Matter More Than The US?

I spent some time on Comscore this morning looking at US vs Rest Of World traffic for some of the largest web properties. Here are the stats for Feb 2010:

Google: 890mm worldwide visitors, 745mm non US – 84% non US

Facebook: 471mm worldwide visitors, 370mm non US – 78% non US

Twitter: 74mm worldwide users, 53mm non US – 72% non US

I suspect Facebook and Twitter will both end up north of 80% once their internationalization efforts are fully realized. Facebook is a lot farther along that path than Twitter but it seems like Twitter is growing like a weed outside the US right now. This is a Comscore chart of Twitter's non-US traffic through February 2010.

Twitter non US 

The conventional wisdom is that international usage cannot be monetized as well as US traffic and that is certainly true. But with >80% of your potential users outside of the US, I think the web sector needs to start working harder on international monetization.

Even if international traffic could only be monetized 25% as well as US traffic, when your international traffic is 80% of your total traffic, you would make as much money internationally as domestically. So that's a lot of potential out there to be tapped.

And of course, not every international market is equal when it comes to monetization. Markets like western europe and japan monetize very well today. Emerging markets like the BRIC countries (Brazil, Russia, China, and India) should be big opportunities for monetization this decade. Other markets may be tough for years to come.

What this means to me is that web services that are highly international today should invest in fully localizing their user experience and then start thinking about monetizing outside of the US. Start with local partners and then start putting people on the ground in your best international markets.

There's a lot of money "rest of world" and I suspect that will only be more and more true over time. So we should start building web businesses with that in mind.

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#VC & Technology

Comments (Archived):

  1. ErikSchwartz

    If you’re running with a high enough margin it makes a lot of sense to accept international traffic monetized 25% as well as US traffic. But if you’re not running with fat margins the story is different.Google search, sure.For YouTube, making money internationally will be much tougher because their nut is so big.

    1. fredwilson

      i suspect a lot of video monetization will be subscription based. not youtube, but hulu and that ilk

      1. ErikSchwartz

        I suspect you are right. But it also seems likely international subscription margins will be comparable to domestic subscription margins.

    2. kidmercury

      hi erik. a bit offtopic here, but i just wanted to let you know that a comment from ed freyfogle received 14 likes today, making it the most liked comment in fredland history, robbing you of your title. sorry.

      1. ErikSchwartz

        Thanks for the heads up. I guess it’s time to be witty and insightful again and not just rest on my laurels.:-)

      2. fredwilson

        What was ed’s comment about?(I’m on my bberry at the airport)

        1. kidmercury

          below is ed’s comment; i copied it here and since it is short. now has25 likes!!! shattering the previous record!!! (previous record waserik’s comment about how mobile will suck until battery life getsbetter)Step one to winning international customers: don’t refer to them as”rest of world”.

          1. fredwilson

            Oh yeah. He got me good and I deserved it and he deserves his place at the top of the leaderboard

  2. sweller

    You are right, a ton of potential.When it comes to localizing experiences, web services that focus on building ecosystems, through apis and such will benefit from innovators in those markets localizing the user experience themselves.I think online gaming is going to innovate and help us experiment with ways to tap into this potential as well, especially with virtual currencies. Is some ways, virtual currencies allow us to normalize the monitization across physical borders.

    1. fredwilson

      great point on virtual currencies

      1. Prokofy

        Oh, hogwash.Virtual currencies are only as good as the national currency into which they cash out. They don’t provide any fabulous translational utopian get-rich capacity because the FBI and the IRS come calling, but long before they do, the platform provider.

        1. Dave Pinsen

          If I owned any Linden Dollars, I’d bet ten of them on Prokofy in this debate.

          1. fredwilson

            You can’t win an argument with prokofy. She’s too good

        2. JLM

          Actually there a number of industries which operate on the basis of a virtual currency or a faux virtual currency.Look at both domestic and international travel exchanges like the Registry Collection into which a resort property owner deposits “time” resulting in the accumulation of “credits” which are then exchangeable over a period of time for the use of other resort properties in the Registry Collection’s portfolio of member properties.This process enables an investor who owns a commodity (resort real estate usage) which otherwise expires worthless if unused and with passage of time to prolong and preserve the value of the benefit by in effect bartering into a virtual currency which becomes a stable value storage sink (used in the thermodynamic sense of a heat sink).There are a number of such barter exchanges which provide similar benefits. The key is to never approach a “balanced book of business” which requires the liquidation of the credits. This is no different than the macro pressure imposed on a fiat currency in which the currency has to keep moving forever. Forever!

    2. kidmercury

      yes virtual currencies are how we put the smackdown on the nation-state, saving the world in the process. but, nation-states will fight back, china has already started. so, as virtual currencies are basically a form of monetary policy, and as monetary policy is a political thing, social gaming companies will increasignly need to adopt a political stance — not only for ideological reasons, but also for economic/profit reasons.

      1. Dave Pinsen

        Developing a virtual currency (backed by gold) was part of the plot of the novel Cryptonomicon, by Fred’s inspirator Neal Stephenson. That was quite an entertaining novel, but it’s ironic that the motivation for the virtual currency in the book was, to quote Wikipedia’s summary, “to facilitate anonymous Internet banking” (in order to to protect individuals against states). Or course, a couple of years after the book was published came 9/11, which prompted a regulatory response coming from the opposite direction (e.g., the Patriot Act), since any anonymous banking that protects non-state actors protects terrorists among them.

        1. kidmercury

          yeah i’ve heard about cryptonomicon….sounds great….i hope they turn it into a movie and put it for free on the internet (too lazy to read a fiction book, too cheap to buy a movie). although in due time this might not be a fiction book!

          1. Dave Pinsen

            Your loss. That might be the most entertaining book I’ve ever read. Since a typical screenplay is ~120 pages, and the book was over 1000 pages (the world’s longest page-turner), any movie version would necessary leave out most of the good parts of the book. Go buy the paperback. It’s well worth the price.

          2. kidmercury

            over a thousand pages?!!??!?! lol, shave a zero off, then maybe stephenson can get my attention. and a picture is a thousand words, so 120 page screenplay is more like 1200 pages. actually the screenplay needs to get shortened to 100 pages. i prefer 90 minute movies that are comedies, very little thinking required.the most i can compromise here is to go to barnes and noble and read it on one of the comfy couches there without paying for it. if i go to b&n everyday for a week or two i could probably get it done. to make up for the hassle of reading maybe i’ll take some sugar packets from the coffee stand home with me as well. and some napkins.

          3. Dave Pinsen

            It might be more like 800 pages. I don’t remember exactly. Still a page-turner though.

        2. ShanaC

          I have a copy, I think it is my passover reading (after the Ramayana)…and I think it may be possible to bring back anonymous banking- push one way to freedom doesn’t mean the other way disappears.

    3. Guest

      Good luck trying to beat it into the heads of american internet industry about virtual currencies. No U.S. company is doing it right at the moment or gets it, and its useless to try to explain it.Then in three years someone will “discover it” 🙂 We could be light years ahead if only more people would listen and learn here in the U.S.

      1. kidmercury

        pfft, i beg to differ. i do believe i am doing it properly. IMHO your statement would be more accurate if it was No U.S. company that anyone has heard of is doing it right at the moment or gets it

        1. Prokofy

          “Pride goeth before a fall, and a haughty spirit before destruction.”

        2. JLM

          I suggest that many frequent flyer and customer loyalty programs are, at the end of the day, phantom virtual currency programs in which credits are bartered in an exchange for services and almost no dollars are involved.

          1. kidmercury

            yes i agree. that is closer to the virtual currency revolution because it clearly shows the economic value as a subsidy, though i wish there was a banking component — i.e. invest your points, barter your points, give them to your friends, etc. i know there are also some services designed to help people barter their loyalty points, which i think would be huge, and will also be a massive step forward in the virtual currency revolution. i think it will be a huge business opportunity.ultimately though, no one will get very far until they realize they are ultimately in competition with the federal reserve and the central banks of the world. as facebook gets more aggressive with facebook credits they will realize they make money when facebook credits are used more and more. and so they will seek to expand usage. that’s why it is so funny when these people don’t want to talk about kookology. lol, okay, good luck building your social gaming/virtual currency business! willful ignorance is going to lose big time here and i really can’t wait for it to happen. i love to see justice served, one of my favorite things in the world.

          2. Tereza

            I’ve heard of divorce settlements where they were fighting over miles. That was a few years ago; I don’t know whether a standard has shaken out on that, nor if it’s a national one or state-based (since marriage/divorce is state law).That would be an interesting place to look, Kid.

          3. Tereza

            The most interesting part of that example to me is that FF miles were created to solve a really specific business problem, but unwittingly, it changed everything.I used to work for the guy who invented them.Today he’s an accomplished entrepreneur. But back then (late 70’s?) he was a fresh-out-of-grad-school special projects doobie working for Bob Crandall at AA. It’s a really funny story, the way he tells it.So apparently, one day Crandall grabbed him and said, ‘We need to have lunch’, which for Crandall meant grabbing a slice somewhere around Times Square/42nd St, which was still super seedy back then. They were standing up, chomping their pizza and Crandall starts venting about how the industry was totally screwed, e.g.: “Lennie, I don’t know what to do. We have all this equipment, we’re warring each other on price, and we have all these empty seats. This is not going to end well.”So Len goes, “Well, uh,…maybe you could give our customers points each time they fly. Then they use those points for our empty seats. Then they’ll want to keep flying with u so they can get more empty seats.””Lennie! That’s it! OK, so now you have to go do it for me.” And so he did.

          4. JLM

            Great story. Carndall’s son worked for a venture fund with which I was affiliated years ago and was a very smart hard working kid. I went out to lunch several times w/ his Dad and he was a very, very driven guy.He is a Sodom on the Schuylkill guy his own self.FF, yield management, computerized reservations (Sabre) — all Big Bog innovations.He has tanked a company — POGO — which was going to make VLJs connect every city w/ a 4000′ runway. Oh well!Small world.

          5. Tereza

            Yes we have observed Sabre in many circumstances. There are a number of industries I’ve been involved with which need a Sabre.I generated a lot of consulting fees spec-ing out Sabre-like solutions that never got built. :-)I prefer to use the term “Quaker”, though. That makes me a Lady Quaker.

          6. fredwilson

            Great story

  3. Akshay Mishra

    When I saw the title of the post, my immediate recation was: “Of course!””Even if international traffic could only be monetized 25% as well as US traffic…” – boy, what wouldn’t I give for that to be the case!There is a long way to go for these services as they do not yet provide what the emerging world needs – and, believe me, it’s very, very hard to make them part from their money.Acquisitions/partnerships rather than organic growth-based strategies would be a better option – because even though companies like Google/Facebook are recognized as “brands” – they are not recognized as brands with a capability for localized execution of services in these markets. Other more localized sites (eg: http://www.flipkart.com in India) have found more success because people believe that they can “deliver” and are willing to pay for them.

  4. andyswan

    Fred what are the biggest hurdles to intl monetization?Payment system adoption?Shipping?Trust concerns?Lack of knowledge of international customs?Or are international persons just less likely to buy online, no matter where the site originates?

    1. kidmercury

      IMHO no question, lack of knowledge of international customs/culture.

      1. fredwilson

        i agree with the kid on this one

      2. jackwelde

        Definitely. Local customs, culture, mannerisms, etc, are critically important for international adoption. In many ways, crowdsourcing a site’s translations/experience offers an interesting method of addressing these issues. Organizations often think about crowdsourcing as “cheap labor”, or worry about the quality of the output. But in the hands of users passionate about your service, crowdsourcing can provide a way for local users to put their own culturally-specific spin on your site — in a way that may actually surprise site owners. Who better to know what your site is all about, and what’s important, than your own users?

        1. fredwilson

          not just adoption but monetization tootwitter monetizes in japan very differently than they do in the US

        2. fredwilson

          I agree about crowdsourcing the localization. It should be at least part of the approach

      3. Diego Sana

        Beeing from Brazil and having co-founded the largest social network built by brazilians (all other SocNets that got popular here in the past 10 years – starting with Blogger – were built in the Silicon Valley) i’d say you’re wrong (at least concerning my country). Despite of the fact that monetizing Social Networks is hard even in the US and that culture does play it’s role (although brazilians are a lot more linked to american culture than chinese, russian and indians), the truth is that money spent online here is not even closely proportional to the big (and growing) number of online users. This is an “emerging country”, so:a) people are less likely to buy services/subscriptions online (although e-commerce is doing fine and growing 40% YOY) because most users are from families that are now going through the phase of buying eletronics, cars and other non-essential goods for the first time in their lives, thus they can’t afford to spent money on these less-essential online stuff, specially because there’s always a free alternative (brought to us by vc-funded american companies :D)b) Companies haven’t yet moved their advertsing budgets to online ads proportionally to the audience size of this media. So selling ads is hard. Google completely ate the ppc marketing (while in the U.S Bing and Yahoo still give them some competition, here their share of the search marketing is like 97%) and only a few portals does serious money on display ads.That beeing said, it’s clear that things are improving fast and there’s still a lot of room to grow. But i doubt that any country will catch (even proportionally) the american market for internet business anytime soon.

        1. Dave Pinsen

          “because there’s always a free alternative (brought to us by vc-funded american companies :D)”I’ve wondered about the effects of this myself: VCs pour money into making expensive web products free to users, in order to rapidly increase adoption, but in doing so do they make Internet users less inclined to pay for things online in general? If so, that hurts even ad-supported web businesses, presumably, because if an audience is less inclined to buy, why pay a lot to advertise to it?

          1. ShanaC

            I would say that really depends. We don’t know how long free internet stuff will last, even in the US. I think over time we’ll shift to quality and to name for price, especially if the object is tailored to us, if only because we’ll run out of choices when chunks of the internet will bust (again…such is life)

          2. fredwilson

            The internet is freemium. Free to start but expensive once you get hooked

          3. ShanaC

            Exactly, and people wonder why I am weirdly pessimistic…I’m concerned whatthe cost will be for what field. Like Internet plus medicine is interestingin the west, and extraordinarily high cost…(remind me to write you aboutthat some other day). Or the cost for a BRIC country to get where ever itplans on going.And I don’t think it is the internet is expensive, it is the informationitself thet exists there because of the way it spreads: you get a pureAkerloff market for lemons situation sped up on crack. The middle fell out.The long tail makes things difficult to find and deal with because itoverwhelms you with waves and waves of stuff- too much choice can be worsethan not enough.

        2. Tereza

          Diego what is your outlook for mobile in Brazil?I worked briefly with a really clever woman at one of the top digital agencies in Brazil and mobile (and mobile advertising) was top of mind for her because of much higher growth rates in market penetration of cell phones versus computer screens.Seemed logical to me. I’d love to hear your experience and outlook.

          1. Diego Sana

            Hi Tereza,Just noticed your question lost in my mailbox, sorry for taking solong to answer.So, i’m not much into the mobile market here, but this week a newresearch was published on usage numbers. If you know just a little bitof portuguese, you can get a snapshot of those numbers in thispresentation http://www.cetic.br/usuario…. Cellphone penetration is indeed twice as big than computers and isstill growing, but 90% os those phones are on pre-paid plans, sopeople use it most to receive calls and texting. Thus, any mobileadvertising campaing must be SMS based if you want to reach everyone.Smartphones are still a very small set of total cellphone sales andonly 5% of cellphone owners have used mobile internet on it.2010/3/29 Disqus <>:

          2. Tereza

            Wow, Diego, thank you so much!+1I think these trends in Brazil (and the other BRICs) are so important to watch. They have the opportunity to push some very important development of the mobile market, IMHO.

      4. iamronen

        lack of knowledge or lack of care?do USA based internet operations care about “the rest of the world”? I don’t think so…while we are at it… do they care about the USA either? I don’t think so either… but it’s closer (in language, culture, economy, etc.) then the rest of the world which makes it easier to monetize without really caring.Maybe it’s just me, but it feels like a very American/Capitalist position to draw a parallel between “Does the rest of the world matter?” with “Can the rest of the world be monetized?”great title… very symbolic & ironic content…I am not happy with leaving this comment!considered ditching it… because I believe the world is a nice placebut opted to leave it… because the world is a nice place but it feels to me like there is a group of people who don’t quite get it… and they seem to be huddled around money, business, monetization and the USA

        1. kidmercury

          i am glad you left this comment and i hope you will feel comfortable voicing such opinions in the future should you continue to have them.

          1. iamronen

            thank you – until I saw your reply to my comment I was still considering taking it down!

          2. fredwilson

            Don’t take comments down. We appreciate all points of view here

        2. fredwilson

          Don’t take the headline the wrong way. My point was simply that we need to wake up and pay attention to 80pcnt of our users

          1. iamronen

            *** Why am I Reading AVC.com ?I think it’s an expression of my trying to not throw out the baby with the water. I have a very low opinion of business-people – but I do have faith in the potential of business. This blog is one of my few remaining connections with this world because I believe in you and can still be critical in my thoughts and writing.*** Does the rest of the world matter?So when I saw this headline in my RSS reader – I was intrigued and came over to see what this was about… and then … well here we are.Fred – I think you are letting yourself off the hook too easy by saying to me “Don’t take the headline the wrong way.”. Step back from your seat, take a look at the headline from a different perspective – maybe one that is more similar to a position the “rest of the world” would take… and well… reconsider…. Don’t use the headline the wrong way!*** On monetizingThis word represents, in my consciousness, a gap, a disassociation in what was a fairly simple concept of exchange – “I’ll help you sow your field in return for some of the crop”. This gap is a man-made obstacle. One of your current names for it is “free”. Once you’ve set up that obstacle you now have a new challenge – called monetizing. In a money-centered society this manipulation may have worked (we’ll see more about that in the long term) – but if money is not at the top of the value system – then you’ve got a problem.I give the American people credit (some pun intended) – they really went all the way with monetizing. You’ve robbed your own citizens of homes and even lives – all through elaborate tools of monetization. Isn’t it an irony that the same culture has given birth to two contradictory economic philosophies “There’s no such thing as a free lunch” and then “free”.Germany gave the world two World Wars to demonstrate how futile the mechanism of war is. In a similar fashion the USA has demonstrated the futility of a purely economic/capitalist system – so thank you! … now the sooner you come to terms with that and leave it behind, the sooner you can join the rest of the world in doing both life and business.*** The rest of the world – Maybe the rest of the world isn’t as caught up in a blind pursuit of money? (though I have a hunch that most of the [business] people in the rest of the world that are associated with USA business are actually of a similar disposition). – Maybe the rest of the world isn’t interested or doesn’t even get what you mean by monetizing – because their cultures focus on different values then yours? – Maybe the rest of the world is actually smart enough to understand your concept of monetizing and they don’t want anything to do with it? – Maybe monetizing represents a modern-day manifestation of colonialism – and that’s definitely a dead end? – Could it be that a failing US economy (and for the record I believe that economy-wise the shit has yet to hit the fan) is desperately reaching out to the world to hang on for it’s life – while the rest of the world is trying to shrug it off like an infectious disease?*** Care – Maybe you should care (make that extra effort to go beyond ‘paying attention’ or ‘monetizing’) more about 80% of your users? – Maybe doing that will lead you into an exploration of what care is? – Maybe learning aout care will change the way you do business at home too? – Maybe this is a gift the ‘rest of the world’ holds for you? Can you see that potential? – Maybe if you cared you will be greeted with open-arms by the ‘rest of the world’? – Heck… maybe by then we will have evolved to the point where there isn’t a ‘rest of the world’ – there will simply be an ‘us’?

          2. JLM

            Some interesting but, in my view, myopic thoughts.America has brought to the world PEACE or what we must settle for as peace in an otherwise troubled world. I fear that peace breaks out between continuous wars. America underwrites the free world’s safety and Americans fund it as our defense spending well documents.American industry was historically and continues presently to be the arsenal of that peace movement. American businessmen were and are the driving force of that industry.Much of the world sleeps in freedom nightly because of American blood, treasure, leadership and the Marshall Plan. When tyranny and oppression are on the march, in almost any corner of the world, America is on the other side.The American lifestyle and quality of life is the best in the world and it is capitalism and the American entrepreneurial spirit and the American style of representative democracy which has underwritten that lifestyle. One can find faults with the American lifestyle, capitalism, entrepreneurial spirit and democracy but the overall results speak for themselves.One can only do good works with a fat pocketbook to fund good works. American economic success funds good works through direct aid and the charitable contributions of its citizens.

          3. iamronen

            JLM – I appreciate your taking the time to read and reply.The discussion you are leading into… if I were to follow you in … would lead way beyond the context of this post or the capacity of this technology… I don’t believe nor subscribe to simple truths… my experience and perception of the world no longer coincides with simplistic causality nor elaborate rational thought (though I used to subscribe to both).I would probably start with your suggestion/assumption that “One can only do good works with a fat pocketbook to fund good works” – in my mind and heart that is just flat out wrong.

          4. JLM

            Not to quibble, I would be the first to admit that one can do personally virtuous good works on a shoe string.I am thinking more about things like fixing the water supply in Africa for all time by drilling 200,000 wells, or American foreign aid in support of HIV/AIDS eradication in Africa or our boundless investment in Middle East peace.Perhaps I was drawing with too broad a brush.I do however fully subscribe to simple truths and I greatly appreciate a sliver of rational thought. Beware of analysis paralysis which leads to wonderful discussions as to what should be done but damn little real progress. When all is said and done, a hell of a lot more gets said than done.A good man or woman with a fat pocketbook is better equipped to change a few things in the world for the better. That is one of the reasons I love capitalism as it allows me to finance my own instincts and follies.

          5. iamronen

            I would be happy to restart and continue this dialogue one on one ([email protected])

          6. fredwilson

            I totally agree with your last point. I’d like to live in that world too

        3. ShanaC

          And this is why I never regretted taking a year off to live somewhere not in the US. You come to understand the way other people think is not the way you think when you are forced to live in circumstances different from the one you grow up with.

    2. Shyam Kamadolli

      As others have stated in the comments, I find every one of the large emerging markets different in their ability to monetize online models. They do need a critical mass of infrastructure for everything to work: good connectivity, payment systems, regulators that allow online models to thrive being the bare minimum that you need for an online lifestyle to be viable. I have noticed that there seems to be strong correlation between the number of broadband users and the ability of local businesses to monetize it. It took getting to 25M users in China for the local businesses to take off (including our investment in Alibaba). (My analysis at http://skamadolli.wordpress…. The rest of the ecosystem shows up when there are enough users and enough seems to be well over 10M broadband users. For some reason dial-up users in emerging markets do not move the needle much. eCPMs are much lower in these markets and you need serious volumes to make up for it.

      1. andyswan

        Excellent, thank youSent from my Millennium Falcon

  5. DGentry

    Companies which incur expenses overseas, even if its outsourced work intended to support the US market, have another incentive to monetize their overseas traffic. Its more efficient to keep money in an overseas subsidiary to pay suppliers in that country than to move the money to the US and back. Exchange rates, transaction fees, and tax complications are costs which can be avoided.

  6. paramendra

    Twitter will eclipse Facebook in terms of user base, but not the Twitter of today. There is work cut out for Twitter. It is because Twitter is custom made for mobile. And the mobile penetration is at least four times larger than old web penetration. That ratio will only get worse.To suggest the rest of the world is not monetizable is prejudiced talk. India has the largest middle class in the world. The ad model will work everywhere. It is already working in many other industries.The monetization elsewhere will be different. So you can’t just impose the ways of doing business in America onto the rest of the world. Those who can’t impose hit a brick wall, and complain the rest of the world is not monetizable. They are looking through the one size fit all prism.The entire world can be monetized.(Oh boy, this is turning out to be a blog post.)This is a high school classmate from my Kathmandu days: http://www.thamel.com He is making ecommerce happen big time in the poorest country outside of Africa.

  7. kidmercury

    maybe more useful to think of economic regions/hubs as they have very different cultures. as an example india, due to its history of the caste system and economic stratification, has many different cultures. the stereotypical indian gas station owners come from a different culture than the stereotypical indian mobile technology entrepreneurs (i’m gas station….gas station owners ftw!).accordingly, i think if twitter can reach silicon valley, it can probably reach banglore. can it reach the random village my dad is from, where literacy rates are low and cow population is high? lol, good luck with that. that market may not be lucrative, but of course the best disruptive models know how to make the unprofitable, rejected, straight up dissed market segments profitable.but of course technology adoption is only a matter of time, everywhere and across all cultures. but i think an entirely different organization, or an organization that will allow for an entirely different marketing approach to emerge, will be better suited to reach certain economic regions. again props must be given to google for having a structure that allows internal competition, i.e. android vs chrome (albert noted this a while back), as i think such a structure will be able to reach different economic regions. will google win AGAIN and embarrass everyone in the process? probably (though not as bad as fred embarassed carlson, lol, that was brutal)of course i think the true winner will be the terrorist/open source model, which is far more conducive to targeting economic hubs, which is the economic reality. nation-state? pfft. on its way out, and models that don’t adapt will lack marketing reach and efficiency, IMHO.

  8. matthewdbenson

    Very interesting. These statistics show how poorly non US based internet companies have performed against US internet companies, despite having by far the larger proportion of traffic (albeit, and importantly, spread across many different countries / economies / political regions / languages / etc.).It also shows what a farce it is that international rights restrictions prevent leverage of content across borders (Pandora only works in US, BBC iPlayer only works in UK, iTunes stores for each region separately, Spotify still only in some European markets, Hulu only in US, etc.). Web content providers need to see a global market for their services (and then solve rights issues), not worry about rights issues, and then see who’s around to buy their services.Similarly, rather than releasing iPad first in the US, and later in the rest of the world, shouldn’t a simultaneous, global release make more sense for Apple, based on above statistics (albeit US is probably the largest individual market, and Apple, being US based, has an emotional attachment to its fellow compatriots – this despite the parts being sourced mostly from Asia, and Apple’s shareholders also being global).

    1. fredwilson

      i agree with all of that.

    2. Fernando Gutierrez

      International rights don’t only affect to content, also to products.I live in Spain and can’t order most of the products I find on a lot of websites. It’s not a problem of shipping costs or taxes (most times I would pay them gladly), it’s simply I can’t because of commercialization rights. Many products have different prices and strategies for different regions, so brands fight ecommerce to be able to keep this.Biggest example for me is Amazon, which only ships outside of the US books and DVDs. I can get all the other categories because I travel monthly to Boston and get them shipped there, but that’s not the usual thing. If Amazon shipped here all things maybe more affiliate links would end in a sale and someone would be monetizing his international traffic. Same with displays adds or any other affiliate program.

      1. ShanaC

        it is incredibly stupid too, and an area ripe for change. If I as a consumer in the US want to buy Indian Chai from India without going crazy, why shouldn’t I?

        1. fredwilson

          That’s one of the great promises of etsy. Today only 25pcnt of transactions on etsy are cross border but I hope and expect that number to be well north of 50pcnt someday. I’d like to buy that awesome peruvian necklace for my daughter directly from the artist in peru who made it. And I’d like to do that from the comfort of my living room

          1. JLM

            That raises an interesting business opportunity — the creation of a virtual storefront in which an Etsy-literate person goes to the Peruvian marketplace and, in effect, displays those wares on behalf of the producers. This is not very different from an e-bay storefront which does not reveal from whence its merchandise comes.There are still great commercial distribution opportunities connecting buyers and sellers through the internet, in effect, creating an exchange rather than a store.The idea of creating an “exchange” is one of the good ideas in the healthcare plan.

      2. JLM

        You have stumbled on a great “re-shipping” business opportunity?

        1. Fernando Gutierrez

          Maybe… I don’t know much about it, but I think there would be some legal issues to consider. And I’m not really sure if there is room for shipping costs + taxes + margin for re-shipping… Sometimes I would use it because there are things that simply can’t be found outside of the US, but for those times in which I prefer to buy there because of price (clothing and electronics are much cheaper in the US than in Europe), probably the savings would disappear with someone in the middle.Recently I read about a company called International Checkout that is supposed to do this, but I haven’t checked them yet.

          1. Fernando Gutierrez

            Thanks for the info! I didn’t know that company but it looks great.

  9. Alexander Torrenegra

    When thinking about internationalization it is also important to consider the “network effect” (sometimes referred to as Metcalfe’s Law). The more people use a network (a marketplace, forum, etc), the higher the value to its users. A positive network effect starts with the architecture of your software. A bad decision may end up costing you A LOT later on. Take the case of http://www.ebookers.com/ (part of Orbitz). Years ago they started launching sites for different countries in Europe. They decided to launch each site with its own codebase and database. They did well for a while, but then http://booking.com (now part of Priceline) started to gain marketshare quickly. Why? Because they had done internationalization properly: any visitor from any country could get a localized version, yet access all hotels on their single global database. Ebookers then started working on a solution. Although it was the main project for the development team of Orbitz (not small at all, of course), it took Orbitz more than three years to write the code and all the logic required to merge more than a dozen databases. Those three years have been VERY costly for them, of course. Booking.com is now, by far, the leader in Europe. In fact, many people attribute Priceline’s success to Booking.com. Here is a chart comparing the stock of Orbitz (OWW) with Priceline (PCLN): http://bit.ly/9dUc0c

    1. fredwilson

      Great comment and example

  10. Shyam Subramanyan

    I’d venture to say that these services might be even more monetizable rest of the world than in the US. Take SMSGupShup in India for example…while we are waiting for Twitter to unwrap its ad platform, this company has an ad platform and a link to their business solutions right on their front page.

  11. HowieG

    We need to learn from Europe. In 1945 individual European countries learned that they can not dominate the world economically or militarily. While I think the US probably has 100+ years or more of military domination economically eventually India and China will surpass us. And once Africa becomes more of a consuming Continent the US will become less important but will still remain important. The goal should be to figure out ways to ensure no matter what country business is done in, the rule of law exists and the ability to spend and collect money safely exists.As for the Twitter graph it shows unique visitors cumulative but plenty of them came and left. With 50 million tweets per day there are only 7 to 15 million using the service on a given day. Facebook is the same. I have estimated about 100-140 million are on the site on a given day and that might be an over estimation.

    1. fredwilson

      HowieThose are not cumulative UVs. Those are monthly UVs.

      1. HowieG

        I don’t believe you. Fred I love you (platonically). I totally admire you. I completely respect you. But I don’t believe the numbers. But forget that. I champion Brands. Meaning if a Brand asks me what to expect using Twitter for example. The FACT is 7-15 million people per day are using the site. I also see many accounts inactive. So 70 million monthly unique is not possible. But we can agree to disagree.As for your premise in your blog post I agree with you regarding importance of the US.

        1. fredwilson

          This is a good discussion Howie. AVC.com gets on average 7,000 uvs per day. It gets 150k uvs per month.Why?Search.The vast majority of those 150k uvs come here once and don’t come back. But they are uvs just the same and they are counted as such by google analytics and comscoreSo a 5-10x multiple from daily users to monthly users is not only normal, its low

    2. JLM

      Neither China nor India will ever be a dominate military force in the next 100 years.Neither country has been able to project force beyond its own continent and emerge victorious. The key to American force projection is logistics. The genius of D-Day was not really the fighting, it was the landing.China and India lack a blue water navy, any aircraft carriers, an aircraft carrier based naval aviation threat and the ability — obviously — to use a carrier task force to deliver a lethal force.Harken back to the Japanese who did just that in the aerial, aircraft carrier based, sneak attack on Pearl Harbor. Of course, we subsequently sunk every ship which ventured to Pearl Harbor demonstrating that the American tiger is a bitch when finally awakened.In addition to the top water navy, neither China nor India have a submarine force of tactical subs (able to make war against our subs) or a ballistic fleet (able to bring nuclear striking power to close proximity of our shores silently). On both scores, the US is not just competent, we are the best in the world.Strategically American naval power is the phantom force which will underwrite and ensure our safety. Right now it is overlooked because Iraq and A’stan are primarily ground wars and the Navy does not have an opportunity to show its stuff.Last note, the American doctrine of the sea, land, air battlefield fought with a combined arms approach (infantry, artillery, close air) is light years ahead of our potential foes; and, the average Captain in A’stan has more combat experience controlling such forces than the average Chinese general.

      1. Tereza

        Wow.JLM — I’m curious since you’re our Yoda of all things military — is our Navy, as the differentiating competitive asset, underinvested and underpractised given the current focus on ground warfare? Is it attracting the talent it needs to, to stay ahead?

        1. JLM

          Our Navy is superb and has not been ridden as hard and put up wet as the Army and Marines. We probably need 20 more Army and Marine divisions today. If Obama had any sense, he would immediately raise these troops and take 500K men off the unemployment roles. Alas!Annapolis is the crown jewel of the service academies.You have to remember that the Navy has been running its ships on nuclear power — 400 nuclear power plants, some having run for over a quarter of a century and not a single fatal accident. Thank you, Adm Rickover!The Russians have a single nuclear powered aircraft carrier that they recently sent to S America in conjuntion with several ocean going tugs to ensure it made it in one piece. The betting pool for whether it made it to S America under its own power with no stoppages was huge. The money was on the under and the winner was too.An Annapolis degree and the Navy’s Nuclear Propulsion School diploma is as close to perfect as it gets.There is huge symbolism that the current Chmn of the Joint Chiefs is a Squid. The Navy Seals give the Squids a chance to get some skin in the game as being played in Iraq and A’stan. They are the most elite troops in the world. It pains me to say they are better than SF, Delta and the Rangers but they are.

          1. kidmercury

            “If Obama had any sense, he would immediately raise these troops and take 500K men off the unemployment roles. Alas!”lol….well i know you are a military person, and 9/11 kooks generally don’t bother military folks too much, it is too hard for them to accept, that’s more understandable than the average citizen who doesn’t have as good of an excuse. although there is veterans for 9/11 truth. but millitary as a “solution” to unemployment, aka military keynesianism, is like all forms of keynesianism — false. the solution is closer to the opposite, as if the offense budget doesn’t come down, the dollar will go. same story with every empire, they self-destruct when they run out of money.although if you really want to pick on obama check out the story about his real name, barry soetoro. lol, so ridiculous, but there is definitely something up with his citizenship and his name. from my research it looks like he is not a citizen and his real name is barry soetoro. this means every law he’s signed is invalid (thank god! no more obamacare! that alone is why we should pursue this issue!!!!). it also means a constitutional crisis. of course, we already have a constitutional crisis, but this would take it to the next level.well, the truth can be ignored, but that will only make the payday that much steeper. lol, this is going to be one huge bill!

          2. JLM

            I happen to agree completely w/ you on the Pentagon budget but my concern is more focused on elaborate weapon systems and weapons developed by the Pentagon with US $$$ and which are ultimately intended for export.We are the world’s biggest arms merchant.We could easily cut the military budget by half by simply initially “delaying” weapons development expenditures and subsequently “cancelling” such programs when we realize we can live without them after all.The idea that our weapons development has to counter Russian development in the face of the ascendancy of the European Union is silly. Let the Europeans underwrite their own defense for a change.NATO is obsolete. It has served its purpose.I do think there is a real need for boots on the ground — soldiers. We have worn out our Reserve and National Guard units while now exhausting our Regular units — in particular, Company grade combat arms officers (Lts and Capts) whose combat experience is the key to fielding battle ready units. An experienced Company grade officer, with a cadre of similiarly qualified NCOs (sergeants), can shape up a unit to a high level of combat readiness.Academy grad, Company grade combat experienced combat arms officers are leaving the Army and Marines in droves at the end of their initial 5-year obligation. It is a brain drain of great concern.As to the economics of it all, unemployment costs probably approximate the entire expenditure for the enlisted component of the new Divisions. It is a “no cost” solution.As 3-4 year regular enlistments come due, you simply contract the Army and Marines having bridged the unemployment period. Plus all these guys will have the GI Bill to propel them into the work force.

          3. kidmercury

            you make some good points i suppose (you know more about a lot of thisstuff than i do), but i don’t think we can get anywhere, especiallywith anything remotely related to the military, until 9/11 truth isaccepted. that’s the big picture. you say we need more troops on theground — for what? who are they supposed to fight? as for theeconomics, the argument against military keynesianism is thatgovernment spending in civilian areas creates more jobs than militaryspending (so it is not just a direct expense issue, but an opportunitycost issue…i.e. instead of sending them to the military, more valuewill come from giving them civilian jobs). the argument againstkeynesianism in general is that the government can’t do anything rightand the private market does almost everything better, save thenecessary evils we need government for. government will always try tomanufacture necessary evils to justify its expansion (i.e. there areterrorists we need a bigger military, the environment is dying we needmore regulation), but of course, their attempts are easily dismissedwhen the people are equipped with the truth, the most powerful weaponof all.

          4. JLM

            I agree w/ you in regard to the inefficiencies of everything undertaken by the government — the main reason why I do not want the gov’t in the healthcare biz. I also agree that civilian jobs are more significant to the long term solution however there are no real needs out there right now as the economy keeps contracting.Blackwater, at the end of the day, is just a civilian Army. A more efficient civilian Army.My whole slant on the military expansion is a 4-6 year time frame as we extricate ourselves from Iraq and A’stan and the economy delivers and we relieve the pressure on the Reserves, Nat’l GD and the Regulars. Sort of a CCC approach but w/ a military bent. The CCC was a quasi military operation commanded by active duty Army officers.I think we need a CCC effort just about now. It would be cheaper than unemployment.

          5. Tereza

            Funny, alternative live paths. Hard to picture this but I almost went to Naval Academy. I was a good volleyball player, and they needed one.A whole bunch of people in my sphere were pushing it hard. Dad most of all. Apparently his grandfather was a general in the Royal Hungarian Army, so there was some sense of unfulfilled military glory (oh, and the free education).But I was heavily into languages and struggled with how that could be done on a big boat in the middle of the ocean.Then I met a guy, a Navy alum, who told me, “Sure they give you a $100,000 education. But they shove it up your ass a nickel at a time.”Ouch!LOL.

          6. JLM

            I am surprised they would not have encouraged you to be a Navy Intel spook listening to the Russians just ourside their ports.With inflation today, it’s probably $1MM and silver dollars?

          7. Tereza

            Double ouch!But yes, indeed, I would have been an excellent spy. I turned into more of a corporate one.I used to keep a postcard on my desk from Britain during WWII of an attractive woman at a cocktail party surrounded by dashing men, which read: “Keep mum, she’s not so dumb.”And still no one would get the hint.You have no idea, the things people tell me.

  12. sigmaalgebra

    NICE data!Gotta keep a copy of this page and maybe add some of the data to my standard executive summary foils!Thanks! I needed that!I hadn’t known: GOOD to know!Yup, and you DID take the next step: Can a Web 2.0 company monetize non-US eyeballs? You answered that! NICE!You just significantly increased what I might believe is the financial potential of my Web 2.0 startup!From the beginning I designed my effort to be exceptionally easy to spread around the world: Natural languages have next to nothing to do with the business, and there is no serious reason for users to know English. So, the effort should be especially easy to “go international”.But I wondered about revenue. You answered that, with a favorable answer. Done!Back to typing software!

  13. Dan Ramsden

    Half-full or half-empty? If the reason that we look at the monthly traffic of web services is as an indicator of monetization potential, and if 80% of this traffic is for a variety of reasons difficult to monetize… then is that 80% a built-in upside for the long term, or should we discount monthly traffic by 80% for a truer estimate of monetization potential? I’m thinking a little bit of both.

  14. Guest

    I think it’s absolutely true but how the internet is used outside the U.S. varies, and laws in other countries vary. You have to be ready to play on a different field. Different laws, cultures, etc., people don’t necessarily care about who you are or who you know in the U.S.On the other side of this, I stopped making things here and am taking all the knowledge I have to other countries. It’s a hassle to get things made here.

  15. Ed Freyfogle

    Step one to winning international customers: don’t refer to them as “rest of world”.

    1. Mark Essel

      That’s great Ed, hehehe!The us and them mentality is diminishing in comparison to useful/fun web site.

    2. enrolled agent exam

      Hee hee. Tru dat.

    3. fredwilson

      Good point. I was just using the comscore categorization. Not an excuse though

      1. Dave Pinsen

        You should have stuck by your guns on this one. There’s nothing pejorative about the phrase “rest of world”.

        1. Bertil

          Yes, there is.You are talking about me, so… sorry, but I know better how I feel about reading this than you do.

          1. Dave Pinsen

            How you feel about the phrase, and whether it is pejorative, are two different issues.

          2. Bertil

            Then I guess, you, I and every dictionnary that I know of will agree to disagree.I would advise you not to have this attitude if you ever venture outside of Soggybottom, KY, but I’m having too much imagining the consequences…

          3. Dave Pinsen

            “Then I guess, you, I and every dictionnary that I know of will agree to disagree.”Here’s Webster’s definition of pejorative:”having negative connotations; especially : tending to disparage or belittle”What about Fred’s headline (asking whether the rest of the world matters more than the U.S.) disparages the rest of the world? Nothing at all. That you are touchy about an innocuous phrase doesn’t necessarily make that phrase pejorative.”I would advise you not to have this attitude if you ever venture outside of Soggybottom, KY, but I’m having too much imagining the consequences…”What is your problem with Kentucky?

          4. Bertil

            > “having negative connotations; especially : tending to disparage or belittle”That’s what I meant. Putting 95% of humanity in one basket is something that the people in that 95% think is negative, belittling and insulting.> What is your problem with Kentucky?As long as you stay there (of Texas, Afghanistan, Alabama or any place where killing people is fine because people don’t really matter), I’m fine.Felt disparaged by my misguided and partial comment in any way? Am I supposed to care about how you *feel* about it?

          5. Dave Pinsen

            “Putting 95% of humanity in one basket is something that the people in that 95% think is negative, belittling and insulting.”You just put 95% of the world’s population in one basket, by presuming to speak for all of them.”As long as you stay there (of Texas, Afghanistan, Alabama or any place where killing people is fine because people don’t really matter), I’m fine.”Two of the regular commenters on this blog, JLM and Andy Swan, are from Texas and Kentucky, respectively. In addition to being regular commenters here, they’ve also socialized with the host of this blog during visits to New York. What do you think you are accomplishing by disparaging their home states?

          6. Bertil

            I was trying to have you react against unnecessary associations, to show you that even you find it disparaging.I’m glad you got my point, and I accept your apologies.

          7. Dave Pinsen

            The only things I learned from you in our correspondence here are that you are touchy, hostile, presumptuous, and unable to distinguish an objective distinction and an invidious one.

          8. Bertil

            I knew we had something in common!

          9. jd

            Bertil, why such dumb commentary?

          10. Bertil

            I really have to flip that question back to you.

          11. Rude Dude

            Bertil, do you know that you just sound rude?

          12. Bertil

            Yup.Sincerly sorry about that—but if you look at the timing of my comments, you’ll realize that was induced by replies from a couple of posters.I’d love to describe it as colorful, but that would just be corny, and I’d miss the opportunity to call someone’s beam over my mote.

          13. David

            Good work Bertil. The geniuses will never be proven wrong. “rest of the world” is not pejorative for them in the same way that telling them that they are sons of a b1tch is not pejorative either (disclaimer: I’m not claim they are the same, but that both are pejorative). Go figure.

          14. JLM

            Actually in Texas, we usually view things as “Texas and the rest of the world” LOLRemember, we were the only sovereign nation to join the United States of America. We are re-thinking that decision these days. Not really, we love all ya’ll.Everything is bigger in Texas, including our tolerance of knee jerk ill informed rubes. Texas has the best economy in the US and has accounted for 70% of all new jobs created in the US in the last 24 months. Remember all those oil royalty checks have to go somewhere.We must be doing something right or all those Mexican and Californian immigrants would be breaking into, say, France?And, yes, we can carry guns in Texas. Even concealed guns. Of course, we need them for shooting coyotes and snakes and folks who would attempt to visit violence upon our people or break into our homes. We’re funny like that in Texas.Gotta run, my horse needs watering!On earth as it is in Texas, ya’ll!

          15. Mark Essel

            “Texas and the rest of the world”Couldn’t help but share this Gaping Void link

          16. fredwilson

            Ah. The gaping void. The illustrator of the blog world

          17. Bertil

            Funny, I heard that your tolerance for foreign immigrants was thiner than your triggers… But maybe I’m wrong to lump the happy smiley welcoming Texan with the illiterate racist frontier vigilantes. What’s the name of that big state near Mexico? The one with the big desert? The one were the flexible gun laws have been fueling the armory of drug cartels and explain the collapse of Mexican state of law?You might want to check immigration numbers in France: for instance, we have by far the most active community of published authors that are not native speakers — and some actually come because they like it here, not because Chiefs of Police end up behind beheaded every month in their home country, and that’s better than being treated like shit by desperate housewives. And we don’t shoot on sight, snakes, coyotes or otherwise.

          18. Dave Pinsen

            Still making friends here, Bertil?”Funny, I heard that your tolerance for foreign immigrants was thiner than your triggers”You parade your ignorance. Houston, Texas actually has a fairly significant community of French expats, thanks to Total’s presence there. They even have their own Alliance Française, which has been “promoting French language and culture in Houston since 1923”.”explain the collapse of Mexican state of law?”There are “flexible” gun laws in some of the states bordering Canada, but Canada doesn’t have anywhere near Mexican levels of crime and chaos. Therefore, it must be something else causing the chaos in Mexico.”You might want to check immigration numbers in France: for instance, we have by far the most active community of published authors that are not native speakers — and some actually come because they like it here…”Third world immigrants come to first world countries (whether the U.S., France, or others) for the same reason: to seek a better life. Whether they find it in France is another question. From France 24, French Police Violence. Excerpt:A Frenchman of Moroccan descent claims he was attacked and abused by riot police in Paris last week. Have you witnessed cases of racial abuse or excessive use of violence by French police? Give us your account.Police reacted with deliberate and overtly racist violence during celebrations in Paris after Algeria’s footballing victory over Egypt last Wednesday, a French student of Moroccan descent has alleged.

          19. Bertil

            > Still making friends here, Bertil?Yes! I make great friends here — like you, for instance: you are not changing my prejudice about American being culturally short-sighted, so I love it.> Have you witnessed cases of racial abuse or excessive use of violence by French police?There are two kinds of countries: those where racial abuse are monitored, and those where they happen all the time. As far as Black comedian know anything about it, I’d say those aren’t monitored in the US.

          20. Dave Pinsen

            No multiracial country, including France, matches our record of advancement of racial minorities. We’ve had black justices on our Supreme Court, black CEOs of Dow Component companies, black Secretaries of State, a black man as our nation’s most senior military officer, and now a black President. How does France stack up against that record? How does Brazil?

          21. Bertil

            You really want to have that conversation with me? On this thread?!Well… I’m gad for the… what? 20 maybe, Black people, that made in the US. It’s a sad thing they all had to apologize for “acting white” — something none of the senior Black & North African official ever had to do in Europe. The saddest from all this post, probably—but let’s investigate.[Disclaimer: if you are a US citizen, do not read the rest of this reply—it will make you throw up, like in the latest South Park episode.]I’m a bit surprised that you think they balance out the 30% of incarceration for adult Black males, or the 5% of violent death, mostly by gunshot, or the millions of uninsured children, or all the non-fatal drug-related issues; I don’t have numbers on teenage pregnancy sorted by race (and they could be higher among White Evangelicals), but based on the echo of the movie Precious, some of those might be incest-related. I’m sure that’s a sign of those families being given opportunities. Maybe not by Police, though: any incident similar to what happened daily to a Black friend of mine who spend a month of his PhD in Chicago would trigger media frenzy here. If I was to be as dark as I can be, I’d say letting so many of them die crushing their own livelihood with their own fat, without help to save their knees, legs, eyes, egos is the worst of all… But I guess I’m biased: after all, I’m a Rawlsian statistician, i.e. someone completely oblivious to the great American tragedy that people can’t look themselves in a mirror without seeing the most inflated version of what they can dream of becoming, instead of what they realistically are and will become. Pumping them up with false dreams and throwing a blanket of misguided “It’s their choice“ over all that misery, and toping that with the cherry of a (white-educated, half-white, half-)black *single* conter-example makes not giving a shit about them from your latte-arugula-gated-community even more acceptable.So that we can agree, could you just do a quick bar-chart for me (I don’t have Excel handy right now): could you just make quick columns of how many African-Americans are: [1] President, General or Secretary of state or CEOs of a large company, and how many are [2] in jail, or [3] died violently last year, or [4] died of preventable disease by lack of healthcare? And could you plot it? and upload it? All four columns on the same scale, and a linear scale, of course: log is hard to understand. I know not so many white folks are President right now (just two, including the VP) and many more are in jail—but after all, it’s tough for them too.I really can’t talk for Brazil, and I’m sorry for that. My sister-in-law is Brazilian, so I can invite her to answer if you care. My guess would be, with a socialist president, they’d be Rawlsian too.My real issue here is not saying that France is better than the US, or any way around—my issue is that you are so oblivious to how different the mindsets are that you don’t even realize how far off the reservation you have gone from usual, let’s say “international” or “diplomatic” standards. Fred replying “I only repeated what ComScore wrote” is so far from anything reasonable: I mean, is that even how you apologize for being offensive? “I just repeated it!”?

          22. Dave Pinsen

            Before I make that bar chart for you, perhaps you could make one for me, comparing the life expectancy, incarceration rates, drug addiction rates, average incomes, educational attainment, and unemployment rates for your black population versus your white one. Feel free to ask your Brazilian sister-in-law to do that for her country as well (if there is even an accurate census available for its favela population).You are standing in front of a glass house, throwing stones.And by the way: “Precious” was based on a work of fiction. It’s poverty porn.

          23. Bertil

            I can’t: it’s illegal to have those number in here.Although, I can tell you that I taught several Master’s classes (aka graduates course) and that, like most Master’s, the class was far more colored than the people in the street:* About one guy out of ten is black, one of of height is North African and one of of twenty is Asian in the streets;* In my classes, about one third was from North Africa, on sixth from Africa, and another sixth from other origins (Asia, Eastern Europe). It’s mostly due to demographics, though: immigrant families (are presumed to) have more children.Those are rough estimates. Maybe no one told you that education (well: tuition) was free in France.There is universal health care, too, so apart from elective surgery (and surprisingly enough dental & corrective glasses), medical care is 100% colorblind here. Several of my friends are doctors, so I could tell you thousands of stories about race, culture and health, although most would turn around hospital dealing with Ramadan fasting. The fact that most doctors are now females did help to attend to Muslim female patients. Apart from deaths from bad eyesight 🙂 or work-related injuries (workers tend to be immigrants or of recent foreign origins; however, those a one order of magnitude less frequent in France than in the US) life expectancy should the the same, or due to genetics, mostly. Once again: collecting those stats is illegal here.Let me insist, though: a comparison of White versus Black isn’t what’s relevant. People can’t choose their skin color (with the notable exception of the character in Roth’s _The Stain_, a work of fiction). What you need to compare are cases separated by choices: say, being Black in the US and in Europe, when considering somehow who thinks about moving. I’d argue you actually need to include a lot more about hard-to-change aspects than just the skin color (primary education, appearances, social network) — but my point remains: inter-color comparison isn’t meaningful for relevant international comparisons.Precious might be poverty porn, I’d argue there are far more (Black) people in that situation than there are Blacks in the White House—so you’d have to be calling any inspiring report on Obama’s, or Colin Powell’s, or Condoleezza Rice’s personal life “wealth porn” if you want to stay coherent with your “in cauda” about statistical representativity of that particular work of fiction.

          24. Dave Pinsen

            “I can’t: it’s illegal to have those number in here.”Conveniently enough.”so you’d have to be calling any inspiring report on Obama’s, or Colin Powell’s, or Condoleezza Rice’s personal life “wealth porn””You are eliding the significance of their achievements, which demonstrate the dearth of institutional racism in this country. That blacks, on average, don’t do as well as whites in this country isn’t due to racism. It’s a pattern that occurs in every other multiracial country (even ones that don’t keep the statistics on it).

          25. Bertil

            Irony is so sweet, actually…After replying, I went back to my usual surfing, and came across something I never realized — but first, a bit of trivia:I don’t care much for politics: most elected officials here are clueless, bullies and divas; I hate it, but that tends to be the case in most countries and has little impact on my life. However, I do know and read a lot about the tech sphere—and I use readers and content filter that tend to remove most images. For instance, I’d spot a reader of this blog anywhere: the way they’d conceive innovation, financing, the NYC tech scene etc. I can tell you after 5 minutes if someone would enjoy or benefit from reading it. However, I have no idea what Fred looks like (no offense to the painter). I could come across him and would probably pester that he’s blocking the way, like any Parisians would do under any circumstances.I know quite well who the main French Googler is (David Drummond, VP of a lot of things) what are his responsabilities, that he recently stood trial in Italy was sentenced to six months in jail (there’s an appeal he won’t have to actually do it—can’t remember the legalese word for that: respite?), and I have a keen idea of what he thinks of the whole affair (mad and somewhat medieval) although he can’t really publicly talk about it, etc. But, like 80% of the people who has an direct impact on my work, I had no idea what he looked like, until a minute ago. Check it out: he’s handsome — but there’s a kicker for you.[I’l wait here while you Google Image the guy.]I know it’s a lame excuse for me to say that this guy is way more important to me than any fair-skinned Minister, President or most CEOs… but on the same page, I also came across a photo of yet another French entrepreneur whose ideas I’m much more familiar with than his appearance: Jean-Baptiste Descroix-Vernier — who has dreadlocks.Not a big deal, but I just found the whole think… Ironic, and oddly reassuring, not for me or for any country, but for the Internet. MLK should be proud of my spontaneous ignorance about skin, and deeper interest in their caracter. Now I’ll be off, looking if any of either has a blog—about their caracter.

          26. Dave Pinsen

            If I were to take your tack, I would ask you how many black Frenchmen are living in poverty, are in jail etc., and compare that number to whatever handful of black French tech executives you might mention. But instead, I’ll just bid you adieu.

          27. Bertil

            No, you’d have to compare those (and they are many North African tech entrepreneurs, and I’m happy to say I personally taught to couple of dozens of those) with how many don’t have health care (officially, everyone has) or how many are in jail simply because the prosecutor wanted to get elected and had a dark dude that looked guilty that was handy a few months before the election (we don’t vote for judges, prosecutors, or chief of Police) — so, please, don’t go and be tacky.

          28. Dave Pinsen

            Since you are fond of American fiction, you should read Tom Wolfe’s Bonfire of the Vanities. It is fiction, but it touches on some truths about this country that you don’t seem to understand. For example, a prosecutor heading for reelection (or an appointed federal prosecutor planning on a future career in electoral politics) won’t score any points with the public by putting a “dark dude” in jail. That’s just a depressingly regular part of the job in a city with a large minority population. Prosecutors score points by nailing a “great white defendant”.For example, the former New York City mayor and recent presidential candidate Rudy Giuliani scored by points with the public when he was a U.S. Attorney (an appointed, unelected, federal prosecutor) by prosecuting prominent Wall Street folks such as Michael Milken and Ivan Boesky.

          29. Bertil

            I’m glad you stick to isolated white elephants to justify your arguments and still consider stats, like jail population breakdown, useless gimmicks for people who care about something else then Kings and Heroes. Not a big fan of Zola, Ken Loach, Victoria de Sica or Steinbeck, are you? *That* 80% of the population.I was told when I started studying stats that this was somewhat a dark art, distrusted and misunderstood: he explicitly compared us to doctors in the XVIIth century; that was the most thrilling thin I could hear. It was a rare rush, and reading your disparaging comments about ‹‹ depressingly regular part of the job in a city with a large minority population ›› made it come back. Because, you know, those are obviously criminals: their heart is so dark it actually shows, see?No country is perfect, and certainly not mine—but God never asked us to be angels, but to be saints: people who care enough to have the will to change, every day. Every day, I care about those who appear to be victim of statistical discrimination, and try to find a way to help them.Every day, I make a effort not to grasp the hair of yet-another moron who thinks that “You don’t know” is actually an argument and not to bang his head on the concrete floor yelling at him in rhythm “I DO know, asshole! I just happen to know! more! than you! do, and actually have! studied that! point with care! numbers! and proper methodology! not prejudice! and stories! taken! out! of! my! arse!” while the blood from his forefront drips all around. I try—but it’s hard sometimes. Tonight, it’s really hard. While I’m taking a deep breath, would you care to point me to a reasonable study that proves your point about what actually makes a prosecutor re-elected? I’m commenting a draft on that topic, from a Law & Economics perspective, that could use the rebuttal.

          30. twillied11

            Good grief, the original statement wasn’t pejorative – end of story. Endlessly droning on will never change that simple fact.

          31. Bertil

            Thank you for pointing that out to me: I guess I didn’t notice that when I wrote that Americans were oblivious to how offensive it felt to foreigners.

          32. twillied11

            Lol! Your initial point wasn’t lost on anyone – it was immediately acknowledged and appreciated – as well as tempered for it’s misapplication. You seem like a pretty smart guy or at least one that likes to try hard to contribute intellectually but your transparent and insecure hostility provides little more than comic relief.

          33. Dave Pinsen

            “DO know, asshole! I just happen to know! more! than you! do”You really don’t. But you are quite the ideologue.”Every day, I care about those who appear to be victim of statistical discrimination, and try to find a way to help them.”Well then your first mission should be to get your own government to collect the statistics our government already does. Beyond that, you ought to think a little harder about your premise, that unequal outcomes are prima facie evidence of discrimination.”would you care to point me to a reasonable study that proves your point about what actually makes a prosecutor re-elected?”I don’t have time to do your homework for you (I’ve wasted too much time corresponding with you already), but it may help if you consider this logically. What gets media attention is something unusual. What sort of prosecution would get more media attention in France, that of a rogue SocGen trader in Paris, or of a youth who sets a car on fire in Clichy-sous-Bois?

          34. Bertil

            > I don’t have time to do your homework for youNo: you don’t have time to suport your assessment with more than a “Pulled out my rear-end” label. My anger was justified; consider yourself physically abused.> your first mission should be to get your own government to collect the statisticsActually, that would be to find methodologies to sort racial aspects from other bias (informal education, assertivity, social network)—and that’s what I do. Thank you very much for encouraging me. We don’t collect racial data because those were used between 1939 and 1945, and we are quite careful about how a populist victory at an election can flip personal freedoms; I’d have Berlusconi as a president, or a vocal Tea Party in my country controlling the message from the largest media group, I’d be worried about that too.> What gets media attention […]Do you know European media that well? There is way more coverage of stats about daily life than of rogue traders. I hate local journalists for being sensationalist in their treatment, but they do respect some estimate million-euro per minute rule. Data used to be collected by Arrêt sur Image in France, OfCom still does it in the UK; I confess I don’t know who does that in Germany; I doubt anyone does in Spain, nor Italy (except fringe groups) which is a shame.

          35. fredwilson

            BertilI’m in paris right now and blocked a few locals from crossing the street a few minutes ago 🙂

          36. Mark Essel

            🙁

          37. JLM

            You may want to consider a semester or two more at charm school, my friend.We love foreigners in Texas, after all every Texan was a foreigner at one time since we stole the country fair and square from Mexico during the Texas Revolution.Speaking of Revolutions, we Americans still are grateful to the French for their support during the American Revolution and pay respect and homage to your decisive intervention. Thank you!I, in particular, love France having lived there as a kid. I cannot imagine a prettier country and better food and more lovely women. I have spent months in the south of France enjoying your wonderful hospitality. And, Paris, the most beautiful city in Europe.French fries, French toast, French kissing — the list is endless!Of course, it only right that we Americans love France as we have bought its freedom with American blood and treasure on at least two ocassions. When you breathe the free air of your great nation, remember to say a prayer for the Americans who wrested your country back from your German neighbors when you were unable to underwrite your own freedom.Or maybe a quick thought of gratitude for George C Marshall, author of the Marshall Plan. Having graduated from GCM’s alma mater, Virginia Military Institute, I am particularly keen on and proud of his service to your country.My Dad jumped into France on D-Day and at 92 is still proud of the Krauts he sent on to their eternal rewards in order to enable you to enjoy the freedoms you enjoy today.Enjoy!

          38. Bertil

            We love it so much when you turn our country into a stack of clichés…

          39. JLM

            As you sow…my friend! LOLOf course, where I come from we don’t consider freedom a cliche. Take comfort nonetheless, ya’ll usually came in second when contesting the Germans, oui?

          40. JLM

            On a serious note, VMI was co-founded by Claudius Crozet, a French military and civil engineer who designed and built what was then the longest tunnel in the US through the Blue Ridge mountains in the vicinity of Afton Mountain just west of Charlottesville (home of UVa).The mess hall @ VMI is named for Crozet. I had many a bad meal there and the cuisine was certainly not inspired by the French.The architecture of VMI is inspired by the Ecole de Militaire and Rob’t E Lee is buried outside VMI in much the same way that Napoleon is entombed behind the Ecole de Militaire.Crozet’s real claim to fame — he was the first American educator to use a slate chalkboard.I wonder why the old boy left France?

          41. Bertil

            OK: why would you fish an institution like VMI (a Military academy) as an example of “non-purely US influenced, heavily international digital service”? Unless you don’t know that, say, WoW belongs to a French company… The reason why I’m so upset after Fred’s casual repetition of “Rest fo the world”, or your clichés, is that this kind of information —that there are major economic, digital players outside of the US that you either ignore of don’t care about— could come as a surprise to you.

          42. Dave Pinsen

            Tell your father a stranger from the great state of New Jersey thanks him for his service.Love the phrase “eternal reward”, btw. Reminds me of this lyric from an old Cult song:The fugitive has been away so long A thousand years, and now he thinks of home The lawmen are waiting in the wingsTo put him in chains upon his return Emptiness, his bitterness is goneJourney on to the eternal reward

          43. JLM

            My Dad lives in Whiting, NJ not far from Toms River and Ft Dix. My Mom, also a WWII vet, is buried in the military cemetery nearby.

          44. Mark Essel

            Both of my grandfathers (now both passed away) fought in WW2 on the Allied side. One left Germany in the 30s when things were going crazy, the other came from France.There is so much we need not to forget about WW2 when it comes to modern wars. Most importantly the motivation for getting involved.

          45. MikeSchinkel

            If you wrote “French companies should look beyond French-speaking markets and target the rest of the world” I wouldn’t be offended to be included in the latter, because it is simply a factual delineation. Why seek out offenses when none were implied?

          46. David

            new definition of pejorative: whatever that does not offend Mike Schinkel

          47. MikeSchinkel

            Now you are learning! See how much easier life would be if you don’t allow others to offend you? ;-p

          48. Mark Essel

            How do you feel about the phrase, the US, and it’s complement ;)?I can respect your sensitivity but you’ll have a tough time convincing Dave of semantics. He’s a stickler for details and wouldn’t mention something if he couldn’t defend it.I like to think of myself as a global citizen, that lives in the US, in New York, on Long Island, in Port Jefferson Station, in a little california ranch style house. The us and them attitude is silly, and grouping everyone outside of the US into one basket isn’t quite right. But jumping all over a phrase is a bit extreme, making note of it is enough. Now I know saying “the rest of the world” in polite conversations with folks outside of this country is a bad move, although I don’t think like that anyway so it’s unlikely. I’ve met way too many cool people from all over the world to bin folks by nation, continent or otherwise.

          49. iamronen

            What does that mean “I like to think of myself as a global citizen, that lives in the US, in New York, on Long Island, in Port Jefferson Station, in a little california ranch style house.”?I get that you like thinking that way – that’s great 🙂 for now, in my eyes that makes you an American that likes to think of himself as a global citizen :)What is a global citizen? We would have to spend some time together to create a shared experience and awareness around that wouldn’t we?I was born Israeli, I live in a small and remote village in the north of Israel, I do not feel a citizen of Israel nor do I feel a global citizen. It took me 37 years of living (in this lifetime) to gain some personal insight into what I believe a home can be (http://bit.ly/a7WALg) and still haven’t had an opportunity to ponder if there is such a thing as a global citizen (though life, with a sense of irony, seems to be pulling me in that direction http://bit.ly/94KDtW).

          50. Mark Essel

            I emailed a rapid response (it should show up shortly). But more than anything, I feel a connection to a community of like minds that I’ve discovered while wandering the web that hail from all over the globe. The affinity and friendship I find for folks far and wide is greater than I have for local neighbors or strangers that may share the same zip code as me.So by global citizen, what I really mean is that those that I feel closest to philosophically aren’t restricted by borders. This is part of what the web can bring to rest of the world. They used to call the US the great melting pot, now I like to think of the social web as the great connector. But the connections are being made by thousands of small social groups, by just a few friends at a time.

          51. Mark Essel

            Hah, good question.Please let me explain. When I meet someone online I don’t think of them as being a representative of a nation first. I think of them as an individual who may share my interests and passions but from a completely different background, and direction.My soapboxHttp://www.victusspiritus.com/

          52. iamronen

            I am visiting your soap-box I am letting thoughts and ideas move around and change shape…just wanted to let you know – I intend to get back to you soon on this – in a private channel 🙂

          53. Mark Essel

            Very nice site design

        2. fredwilson

          Its not perjorative but its very america centric. That’s not how I want to be. I want to be a good citizen of the world

          1. Dave Pinsen

            I think it’s just a factual delineation, like another commenter said. It’s also the pithiest one I can think of to describe the rest of the world, not including the U.S. But perhaps a clunkier phrase such as “Global ex-U.S.” would please the folks who are touchy about “Rest of World”?

      2. ben_t

        Well, at least we know 80% of the comments to this post are “rest of world,” and are also unmonetizable. Worthless might be a better word actually.To the “rest of the world,” feel free to comment here, but please stay on topic.

    4. kidmercury

      wow ed. at the time of this writing there are 21 likes for your comment. you’ve just made the most popular comment in fredland history — and by a wide margin. congratulations.

      1. fredwilson

        I concur with the kid. Congrats ed. Nicely done

      2. Ed Freyfogle

        Thanks Kid, though I’ve read and learned from many better comments here over the years. My point is this – getting people to give you money is hard work. You need to earn their money. That rarely happens when treating them as an afterthought.

  16. dabent

    The site I work for only accepts members from US, Canada, UK, Ireland and Australia. It has to be that way to combat fraud. The non-us traffic for other sites I’ve built has meant one thing: spam. If there was a way to better filter out fraud and spam from certain countries, I bet one could hit that 25% number easily.

    1. MikeSchinkel

      Minimizing global fraud: sounds like a pretty compelling value proposition for some motivated startup, eh?

  17. daveclark

    Long time listener, first time caller. To the extent we are talking about advertising when we talk about monetization: The US is 48% of the worlds ad market. The next ~40% is 8-10 markets, essentially western Europe + Japan (#2) & China (now #3). What is left is the remaining ~160 markets. So when looking at ROW, pull out those 160 – it is too inefficient to go after them. The traffic from the 8-10 is valuable (how much is that for you?) But beware…companies typically underestimate the cost, learning curve and time needed to win in these markets, and in doing often dilute focus from winning at home, and that is a big thing to risk for a startup. If your business depends on localization of UX, biz ops, or acquisition of local rights to content (particularly brutal), knowing when your business can tolerate the extra burden to branch out is critical. If your business inherently scales friction-free across markets with little need to localize, then game on. But heck, given the pain for most, feels like there’s a (or more) business in helping US startups win overseas.

    1. fredwilson

      Great data and comment. Thanks

    2. ShanaC

      Well of course. But that is what makes it interesting to see what happens when we get a startup out in somewhere else. It will also be interesting to see what this “local” trend means in a place that is radically different than the US- like Indonesia.I’m looking forward to seeing what happens- being out in the rest of the world means seeing other mindsets to the same problems with the same tools. Game on.

  18. majorwho

    Yes, customs and culture matter more than anything. For instance, in China, they have very little use for copyrights and compensation for intellectual property. Though the (western) international community is working hard to get China to recognize and adhere to its principals, it is unlikely that any business model based around collection of revenue from IP or copyrights in China will succeed – at least for the foreseeable future.

  19. Bertil

    Don’t you think you could do better than “Rest of the World”?Europe, Rest of Commonwealth and Asia have completely different prospects — I’d even disagree you’d have to pool all Asia together, putting China apart would be a first. Middle-East, South America and Africa are yet another problem, and certainly don’t show the same adoption rate for all the services that you describe.Neither have a total ad budget per inhabitant as large as the US—but Google makes significant revenues from European users; other companies haven’t figured out how to adress what is obviously a more mature market in term of advertising.Now, regarding the problem you seem to infer:* Payment system adoption? Trust concerns?Payment system outside of the US tend to make far more sense then your crook-ruled ID-theft-ridden credit card system. If anything, that should explain a US lag.* Shipping?All these are purely on-line business — and there are local e-merchants that happily advertise and have no worries using local shipping services, thank you.* Lack of knowledge of international customs?All these services rely on elementary social elements: pages, links, friends, followers; local customs adapt to those and give them meaning. In most of those, you don’t have anything that explicitly matches the typically American unit of “Community“ (that seems to be a code-word for Parish, or locally, socially, racially & religiously coherent entity) mostly because it’s so hard to define better — but that would be a tough export. If Facebook-defined family ties don’t make sense in a non—nuclear-family—based society, they just don’t use it, and leverage groups or apps instead.What really matters is that most of these company haven’t tried to contact local advertisers and are fine serving irrelevant ads to 80% of their users. Calling it absurd would be the nicest thing I can say—but I’m sure if a non-US based service takes up in the US and someone from there sees an ad for a non-US service, they’ll be far more colorful in calling them clueless.

    1. fredwilson

      Yes I could have done better than that headline

      1. Bertil

        The problem isn’t the headline—the problem is that you treat “the Rest of the World” as a backward lump, while there are many, many things you could learn from it: Asia is much more mature in terms of virtual gifts, vouchers; Europe is far more mature for ads, payment options… You are a VC, so you know better than anyone what I mean by: “your mistake, your loss—it’s your money after all…” but I still believe you deserve better than that post.

        1. Dave Pinsen

          “The problem isn’t the headline—the problem is that you treat “the Rest of the World” as a backward lump”I missed the part of this post where Fred treated the rest of the world as “a backward lump”. Would you care to point it out?

          1. Bertil

            At no point, he considered that US could be part of the rest of the world to many non-US companies, and to compare their approaches to US-based companies. He never considered that to a vast number of employees at Google, including one founder, “the rest of the world” is actually home and he never mentioned that their success is precisely due to the fact that their hired someone to keep repeating that Google isn’t a US company, and that there is no “Rest of the World”. He didn’t described markets more mature than the US as “Markets like western europe and japan monetize very well today.”—implying that the were catching up, and not that it’s actually US managers that finally got their head partially out of a hole.You being insensitive to that is actually what makes it worst.

          2. kidmercury

            hmm, very extensive beef here between bertil and dave pinsen. my unrequested thoughts:1. instinctively, i felt “rest of the world” was a poor choice of words. i confess to being one of the 14 people who like ed freygogle’s comment calling fred out on this — which, i should note, is the most popular comment in fredland history. so, for what it’s worth, the choice of words was disapproved by a sizable faction of fredlanders.2. but, after thinking about it a bit, i wonder: if fred was in africa, south america, asia, or practically anywhere else, and he used the phrase “rest of world” to refer to all the countries aside from the one that was his home, would it be interpreted the same way? or would it be more tolerable? i can’t say for sure, though i’m inclined to think no one would care. is that unfair to americans?3. now, i have no sympathy for my fellow americans — by and large they are a disgraceful, ignorant bunch who won’t take responsibility for their warmongering government (save cool, good-looking people like myself and other 9/11 truthers). so i think the double standard here is fair and justified. the world’s bully does deserve special treatment. criminals always do.so, personally, if americans took responsibility for their government and its extensive history of overthrowing foreign governments that did not comply with the will of america’s military industrial complex, i would not be so quick to accuse them of being disrespectful. i wonder if others feel the same way? i doubt it. but if not, what should americans do to be perceived better? simply use different words? if not “rest of world” than what?also, i think one thing people were drawing from the usage of the term “rest of world” is that fred is lumping all countries outside the US into one category, as though everyone else is just the same — they are not american. but in the blog, fred makes it explicitly clear that he is NOT doing that — that other markets need to be treated differently based on their own unique attributes.

          3. MikeSchinkel

            The phrase “the rest of the world” doesn’t indicate where they are, just where they are not.BTW, there are two types of people in the world: 1.) those who think there are two types of people in the world and 2.) those who don’t. 😉

          4. David Semeria

            Actually, there are 10 types of people in the world.Those who know binary, and those who don’t.

          5. MikeSchinkel

            Touche’!

          6. Bertil

            > if fred was in africa, south america, asia, or practically anywhere else, and he used the phrase “rest of world” to refer to all the countries aside from the one that was his home, would it be interpreted the same way?That’s a counter-factual hypothesis. People outside of the US don’t lump “The Rest of the World” with the same casual disdain that the US elite does admirably. They know it doesn’t make sense, no more than having a category including: “Red things, dangerous situation, women, fire and all things that are very annoying”, unless you are a moronic sexist.

          7. kidmercury

            lol, but it kind of does make sense. how else would you refer topeople outside your home? sometimes binary classifications make sense;i.e. there are people in your home, and then are people outside yourhome (aka “rest of the world”). no?

          8. Bertil

            How else would you refer to women if you don’t have a category that includes all things annoying, bratty and nagging?

          9. fredwilson

            A poor choice of words can ruin a good train of thought

          10. JLM

            Wow, aren’t we sensitive? Instead of being offended, why not just point out the more finely focused vision from your lens? Your point is well made absent the whining.I am pretty sure Fred was not trying to offend. He might be a guy who would risk drinking red wine with seafood but he is not an offensive chap.JLMAustin, TX — where we don’t take offense easily from the “rest of the world”

          11. Bertil

            Whining? — I was simply trying to trigger Dave’s “patriotism”.I know Fred means good and it in the better 1% of the US population: this only makes his post even more offensive. Based on the conversation in this thread, you have no idea how having an elite so clueless about foreign countries worries non-US citizens.

          12. fredwilson

            I accept your criticism and embrace it. But let me just be clear about the phrase. I took it from the comscore report

          13. Tereza

            Right or wrong, this terminology is rather standard here in the U.S.Clearly that is a problem which should be addressed. And that’s a critical takeaway.But there are so many important sub-topics we’ve been distracted away from exploring, at least not in the first ~100 I’ve read. Maybe there’s more in the bottom half here. I bet there are, but my eyes are getting bleary.Can’t we re-boot this conversation and give Fred a Do-Over?

          14. twillied11

            Exactly – necessary perspective adjustment noted – moving on now.

        2. fredwilson

          I didn’t mean it that way and I understand how complex this issue is. I was just trying to make a simple point and botched it

  20. K H

    China owns most of the US debt. China owns the US. Period.

    1. JLM

      Not really.China has a huge trade imbalance w/ the US and derives its US dollar income from that imbalance. The US buys more China stuff than the Chinese buy US stuff. This is further compounded by the fact that a significant amount of US stuff is being manufactured for the Chinese market in China.China has a voracious and growing appetite for oil to drive its emerging Indutrial Age economy. The oil business is conducted in US currency. The US currency is the oil dollar.China keeps its reserves in the currency in which it is derived and the oil dollar.When you owe a bank $1000 and cannot pay — you have a problem.When you owe a sovereign nation $1T and cannot pay — the sovereign nation has a problem.In many ways we own China. Who would be hurt the most if our mutual trade relationship were to be ended precipitously?

      1. kidmercury

        the dollar system is the ace in the hole, the only thing saving the US empire. everyone invested in it loses when it is broken. but as the US economy produces nothing but war and debt (debt being dollar dependent), and as the chinese economy produces stuff, china will “win,” for lack of a better term, in an economic showdown, IMHO. schiff makes the argument more eloquently.of course the kook argument is that clinton and paulson and much of the anglo american faction are already busy chillin’ in china on a regular basis, and so they will happily agree to a “solution” to the problem, perhaps something that involves a world government, with a world currency, as has been expected by many kooks based on their research. heaven help us if this world currency is tied to carbon credits and a global carbon tax, lol, i mean i will go off like never before if that happens…..lol

      2. RichardF

        China are playing the long game. They are happy to keep the relationship as it is. Meanwhile they are buying as much and as many commodities as fast as they can with the dollars that they are earning.If they can keep this strategy up unhindered I think it’s possible that one day, in the not too distant future, we’ll wake up to that fact that China have diversified away from the dollar and the renminbi will become the commodity backed currency of choice.

        1. fredwilson

          I guess I should start buying their currency

      3. sigmaalgebra

        I’m no expert on China and have never seen any solid, credible, numerical data on trade, balance of payments, etc. (as if journalism hires only English majors who smoke funny stuff, dream of writing a ‘Great American Novel’, and are not permitted to ‘use numbers’), and I don’t think much of ‘Forbes’, but they CAN have guest columnists, and on China recently they did. So, can seehttp://www.forbes.com/2010/…It’s the most credible looking, and informative, information on China trade I’ve seen so far. I don’t know the author; the piece has only ‘face validity’. But the rest readily available if printed would be too rank even for kitty litter. I wouldn’t let my kitty cat pee or poop in that stuff.

        1. kidmercury

          any economic analysis/forecast that makes no mention of monetary policy is missing the big picture, missing the important information and focusing on all the details that are both harder to predict/analyze and are ultimately dependent upon monetary policy. if you like forbes, one legit columnist they used to have is benjamin fulford. lol, he has some crazy stories.

          1. sigmaalgebra

            “If you like Forbes” …Uh, I said “I don’t think much of ‘Forbes'”.You are saying “missing the important information”: I believe I did give a subtle hint that maybe I thought that the information was of questionable quality: “But the rest readily available if printed would be too rank even for kitty litter. I wouldn’t let my kitty cat pee or poop in that stuff.” Yes, I DO like my kitty cat, but he also has SOME standards!Yes, a clear statement of “monetary policy” would be closer to crucial ‘causality’ then just the numbers the journalists hate, but getting such a clear statement promises to be difficult. The actual numbers of trade, payments, etc. are doable and maybe available and, thus, likely much of the best lacking the impossible.<facetiousness> Horrors, horrors: Fred started this thread with a graph! A GRAPH! Of NUMERICAL data! Moreover, to rub salt into the offense, he clearly labeled the axes and gave his source! So, it wasn’t just a factually or informationally neutral piece of graphic art but a display of actual cold, hard, insensitive, non-empathetic NUMERICAL data! Horrors! Such outrageous violation of the solid norms of the professional standards of the highly trained and experienced professionals in the journalistic profession! Fred will have to be flagellated by NYT girly men and manly girls with noodles of fettuccine Alfredo or wet copies of the NYT style section! Help the MSM stamp out ugly numbers! Compelling adjectives only! Fiction above all else.Save us Jane Austin. You are MSM’s only hope! </facetiousness>

          2. kidmercury

            Well, I think its pretty crazy you insist upon relying on forbes for your news, but since you clearly do, I think you would benefit from finding commentary that focuses on monetary policy, IMHOSent via BlackBerry from T-Mobile

          3. sigmaalgebra

            So, let’s see:I said that Forbes, printed on paper, was less good than litter box filler for my kitty cat.You said that I like Forbes.Okay: That must mean that you like kitty cats a LOT!Yes, I like my kitty cat. Good to hear that someone else really likes kitty cats!

        2. JLM

          China is an interesting study and I am intrigued by China but one thing I have learned is that the laws of gravity and business appear to be the same worldwide. Not that there are not unique views from China nor that there is not a unique China lens.I have devoured tons of books on China, my favoriting being Kynge’s. It is a great read.One thought keeps bouncing around in my head about China — they show the face to the world that they want the world to see.One of the things that has happened from the recent economic crisis is that we are all a lot more knowledgeable about what the other economies in the world are really doing and their economies are controlled.

  21. John Honovich

    For my company’s niche subscription based research service, 60% of our visitors and revenue are from people outside the US. We have been pleasantly surprised by the number of subscriptions from Eastern Europe and Southeast Asia, so it’s not just the UK or Australia signing up.We do not spend anything on marketing internationally. It just organically happened. We are quite happy about it and think it provides a much larger and diverse customer base.

    1. fredwilson

      That’s a great example. Thanks for sharing it

  22. Mark Essel

    Ideally any startup I build or work for should be striving to make their tools the best mind candy for global web hackers. That means thinking about our services as invitations, more than products. This opportunity requires cultural knowledge of each potential market.The US percent of financial return on visitors will fade as you can see. There’s still plenty of local opportunity and the connecting of virtual currencies and cross pollination of communities. The tools I work on speak open web standards, feeds > services.

  23. andrewscott5

    So you’re talking in terms of Internet traffic but in terms of economics, the rest of the world does matter because we’re the kaboos (sp?) and we’re holding other countries back because, for some ungodly reason, they think we’re a great country and have an amazing economy.Why do people believe our own lies? That new movie The Joneses is a great representation of the United States!

  24. JLM

    Fred, what an interesting and well documented story, as always.I bet it would reveal some interesting information to use a cable tv analytical technique of deriving the “penetration” rate of the US v the rest of the world.What percentage of the possible connections in the US/world have been passed by the applications and what percentage have connected?At the end of the day, the geography dictates a “value per connection” no different than the gambling business injects a different value per customer dependent upon whether it is Las Vegas, Atlantic City, Biloxi or elsewhere.A customer in India will have a different value than the US or England. In the end, it is the aggregate value of the customers (# customers x average customer spend) which determines the real value.

  25. Sharon Lew

    Interesting potential there. However, and this is coming from a simple city girl who is not a VC.. i think ‘they’ just don’t naturally think of monetizing everything. That’s what ‘we’ are for, and that’s why ‘they’ usually have zero respect for ‘us’.

    1. fredwilson

      You gotta run a business

      1. Sharon Lew

        lol. your full disclosure and honesty is my favorite part of your blog! thx

  26. Mihai Badoiu

    There are many difficulties to internationalization. Usually it’s not as simple as allowing traffic from abroad. Here are some of these difficulties:1. language. this can be radically different, such as chinese, which require solving other problems, such as language segmentation.2. data feeds, different data providers of different qualities. may require local contracts. example: data feeds on maps, such as geographic data and localsearch data.3. users behave differently. may require a different strategy to capture and defend the market. may require a different product altogether. this happens especially in japan.4. cultural values. godtube probably wouldn’t be popular in SF.5. local laws, such as, no video sites allowed in china if company is not native.6. privacy issues. face recognition may be illegal in western europe.7. infrastructure and available technologies. in africa for example, there are a lot more cell phones than computers, but only SMS-capable.8. politicians and corruption. you generally don’t have to worry about this unless you’re a big fish. Some Google execs have been convicted in Italy.9. sales. may require a local direct sales office.10. competition. local competition can be very serious to non-existent. See Google in south korea (about 1% market) vs brazil (90%).11. data analysis and quality. requires engineers to understand local languages.12. may require changes in technology, eg, speech, vision (OCR).13. market/domain knowledge. the founders will not be familiar with that particular market.Internationalization may be hard.–mihai

    1. fredwilson

      Yes. Thanks for outlining all of them

  27. ckemper

    The internet has changed the game for startups & venture investing dramatically. Even in 1999, only 41% of internet users were in the US. Obviously with the declining cost of computing, connectivity, and mobile broadband, internet media will only continue to grow outside the developed nations of the US and Western Europe. Marshall McLuhan’s “Global Village” really is finally coming in to its own.The last wave of innovation pre-internet (so, personal computing & software, and even early internet) had a fraction of the addressable market that internet companies can reach today. Put in to context, a mere 30 million PCs were sold globally in 1992. Today that number is estimated at over 360 million units globally. And that doesn’t even count the 1+ billion mobile devices sold annually, many of which are rapidly transitioning to 3G data enabled.Innovation today is no doubt global and the US has a tremendous first-mover advantage at building global scale companies.

    1. fredwilson

      Mobile is where this really plays out

  28. Prokofy

    Many people snicker at Second Life, and you don’t seem to care about it, but I stand by my claim that it prototypes much of social media and comes to realizations about social media way before everybody else, i.e. Google Buzz is merely a Second Life group, and without even the ability to transmit inventory.Back in 2006-2007, Linden Lab realized that “the rest of the world” made up more than the North American customers. They began to actively play to this 60 percent of their user base, even at the expense of the 40 percent U.S. Everyone became terribly politically correct, being careful never to say “foreigners” because now Americans were the “foreigners” and in the minority. Everybody, especially me, who can speak foreign languages, which I will continue to call “foreign languages” the way non-English people do in *their* languages, began to put search terms and translators and adaptations everywhere to get Brazilians and Spanish and Dutch and Russians as customers.All good, but here’s some things they learned, which you could learn from too if you take the prototyping capacity of SL as clue (it is a microcosm of the Internet in 3-D where it is easier to connect to users and get information and easier to start a business than RL or even web 2.0):1. Americans still spent the lion’s share of user hours on line. That’s because some countries have to pay more for Internet time, or people have less leisure time, or had less good graphics cards or whatever — but the Americans outpaced everyone in *time*.2. “the rest of the world,” even if you lump it together, still breaks down into countries. These countries have all kinds of problems:o the EU and other countries have VAT, which really puts a break on sales, to the point that really angry movements get started of customers demanding that the American company reduce its prices to calculate in VAT, which is of course unfair to American who don’t (yet) get socialist health care and other benefits that VAT brings. Again: the customers hated VAT which is part of a price but *on top* of a price, and wanted *the price lowered* because they felt Americans had an unfair advantage. We would tell them to complain to Brussels, not San Francisco, and change their laws.o Some countries have censorship (China) or they suddenly have scandals on things like child pornography (Germany) or they suddenly have a lawsuit on Google and privacy (Italy) or they have easily-used libel laws (the UK) or their business people can suddenly be put in jail or lose their licenses (Russia). These things happen a lot less in the U.S., so while all those “other” populations swarm in, you have to realize they can be very, very unstable, and one media article, one law suit, can decimate a population onlineo Localization worked badly for Linden Lab. They got a half dozen local companies they partnered with, from Brazil to Australia to Japan, and none of these companies remained after one or two years because they could not get ROI. And you could gripe that this was a specific virtual world problem, but in reality, monetarization of social media and smart phone APIs and widgets is even harder on the Internet at large than in virtual worlds (last year LL made $550 million in transactions in real money with 1.4 million unique customers regularly logging on within the last 60 days; phone aps made $500 million games and I don’t know what on the rest of their apis, but it doesn’t seem like a per capital windfall yet; Facebook also made only some $500 million on virtual good sales, and an untold amount of revenue on other advertising deals that we don’t know about, but which do not appear to be a windfall either (Zynga and some of the payment companies only seem to be making millions.)o Why did localization work badly?– crowdsourcing translation for free in the belief it cuts costs — it leads to uneven, bad, and unprofessional results. I marvel that you can pay coders $50 an hour or more, or even tweeters $12 an hour or more, but you expect a translator to work for free out of the goodness of his heart and belief in the betterment of mankind– lack of diversity in localization partners — there are several big companies around the world that hog this spot in some countries, often with close ties to corrupt or oppressive governments, and that prevents reaching authentic user bases– not cutting them into a big enough piece of the pie — they have the 60 percent of the customers, you don’t, but you act as if you are still the center of the universeo By and large, BRIC populations are poor. They want monetarizing opportunities on the Internet, but they don’t want to be paying out a lot for content or services. They are a huge pressure on the Internet for “free culture” and all the technocommunism I so rail againts. These countries are a source of a lot of the malicious hacking and piracy in the world, and you have little recourse in their abusive and inadequate legal systems to gain justice.o Um, where do you see big successes with Americans investing in media overseas and wildly succeeding? If anything, it’s the opposite:o Live Journal was sold by Americans to Russians as Eurasians were among the largest users; LiveJournal was then shut off by the censorious government in Kazakhstan and while not especially curbed in Russia itself, is still a place where self-censorship goes on; one of the awful cases we’ve seen in Russia lately is Microsoft Russian lawyers in collusion with corrupt local governments savaging local non-profits they don’t like politically on charges of software theft.o Do you know who owns an enormous share of Facebook inside stock? The former Soviet Union’s most notorious Uzbek oligarch.I guess reading about all this that I think everything is going to work very, very differently. Companies will be investing in their own countries in their own versions of these social media platforms like V kontakte, or they will buy out poor and desperate Americans. They will operate systems that will have less ethics and more rapacity than even Silicon Valley has been able to muster in this space.

    1. fredwilson

      This is a great comment. I agree that there is so much to learn from SL. It is the prototype for much of social media and social gaming

    2. Tereza

      Prokofy, those are really good points and consistent with my (non-SL) media experience.I actually wrote my Master’s thesis on alternative globalization strategies in media.Since it was in the age of the dinosaurs, pre-Web 1.0, it was largely a comparison of Disney (then totally an export model) versus News Corp (locally focused, due to their newsprint genesis).Having just spent, at the time, three years launching a TV network out of Prague and then a summer with Disney doing wordwide content distribution, it was very clear to me the real money was to be made on the ground, locally. Even in a business like TV, where at the time the capital requirements were so high, and there was scale to be gained by cross-border contents rights deals and the like.In fact, our company, CME, at the time did a fantastic job creating a hybrid local/international; launched in some 14 countries, IPO’d, made lots of money. I was just a kid then, and during that period went back home to go to b-school.Then one day, the local Czech partner hijacks the broadcast signal, diverts a bunch of program rights to a separate company…and Poof!Tons of shareholder value, across the entire holding company, gone overnight. Lawsuits, inter-governmental litigation. Crazy stuff. Incredible bitterness, sadness, etc.Indeed, there is money to be made. But it is extremely complicated.

    3. Gui Ambros

      Great great comment / info, @Prokofy! Thanks a lot for sharing. Remembered me a lot the “Lessons From Habitat”…

  29. ShanaC

    What interests me when I see this is that I see the possibility for radical disruption. I am in no way ready to understand in the emotional terms necessary to make a product succeed someplace halfway across the world. What do I know of life in Jakarta that would help a website aimed at people in Indonesia? Nothing. I know some basics from the US, and a little from Israel (though not as much as an Israeli) that could try and help that business along, but never enough to say that I truly understand. I can try, yet at the end of the day I need someone there to help me.It pushes localization to the front of the “Global Village” with all of the unneighborly parts, the misunderstandings of people NOT LIKE YOU. However, it also means that I will learn over time from these people. It means working out a lot of problems, and it also means over time, giving up control. it also means that we have to change how we think of monetization- and empower people on local levels to make money on THEIR terms. Not the ones we think of here.So one of the most interesting things about this chart- if I can not truly understand- someone else in that market can, and I probably would do best by trying to learn how to help along. That chart in essence is the joy of local on a massive scale. And that is portentous of how much of the internet will look like in the years to come.

  30. Tereza

    I will be pleased to see more attention and respect given in the web world to what’s going on ex-US, and building real, monetized businesses elsewhere.In the corporate world, for the last 10-15 years, experience outside of the US has been perceived as exotic at best and irrelevant at worst. Some exceptions were made for BRIC, but for the most part, if execs were successful ‘out there’, they kept ’em out there. Obviously I’m over-generalizing somewhat, but I’ve seen a lot, have an MA in Intl Business so pay attention to it… and I will tell you more often than not going overseas from the US has been career suicide.Transferring back from overseas and getting a “good job” here — almost impossible. Tendency has been to sideline and wait for them to eventually find there way elsewhere.The prevalence of outsourcing and cross-border teaming via Skype has certainly helped a lot on the back end, though.Maybe 7 years ago, saying you were from Slovakia was quaint. Now that I can Skype a friend-of-a-friend in my dad’s hometown who has a massive gaming development background for counsel on how to handle a particular issue? Priceless.But the best way to engage any person, no matter where they live, is to treat their home as a serious market as well.

  31. William Mougayar

    First, an observation: the numbers you’ve pulled here apply to consumer-based markets, and not necessarily to b2b (which is another beast that faces more international hurdles than b2c).That said,- traditionally, US companies have used their domestic strengths & profits to build strength in international markets later. And over the last several decades, the US has had more success than any other country in building large multi-national companies. I don’t see this changing in the near future.Fred – are you implying that US web-based companies aren’t expanding fast enough internationally?

    1. fredwilson

      Yes I am and I agree that b2b is much harder

  32. MikeSchinkel

    I think you are spot-on.From 1994 through 2006 I ran a software reseller business selling software developer tools to Microsoft-centric developers (i.e. Visual Basic and .NET developers.) Our rule of thumb was 50% of our sales were US-based and 50% were from the the rest of the world.And our sales numbers proved it.

  33. RichardF

    On every level I dislike this headline but I like the point you are making.The very nature of the title indicates a major reason why US companies don’t “get” international monetization. Their home market is so large and homogeneous they don’t need to think about the “rest of the world” initially to be successful. Any internet start up company outside of the US that has any desire to be huge needs to immediately think about international monetization, even if the first strategy is to try and crack the US. It’s a mindset thing.This can be applied to products as well as the net but unfortunately in that area the US isn’t so successful as their tech companies currently are (and doesn’t have the competitive advantage of Asia). I look around me and think what US products do I own? umm.. the iPhone (made in China)Sure, Starbucks is a huge hit over here in the UK and so is Coke but that’s an easy pay day because it’s selling a slice of the “American Dream” no localisation required there.The internet is making the world a smaller place but the cultural differences still remain. If US internet companies cannot find a way to monetize their services in the other countries in the “rest of the world” then local competitors will fill that gapOf course if the infrastructure (i.e. broadband) is not in place yet then that market is a difficult one and one in which local competition have an advantage because they understand their local customer and how they transact far better than someone sitting in their web 2.0 offices in NorCal.Asia is where it’s going to be in the next 100 years. The markets are huge and their economies are still taking off whilst the US and Europe are stalling and they are difficult markets for western people because of the cultural differences.Going forward monetizing “the rest of the world” will not just be about trying to earn some additional revenue above the home US market it will be about ensuring competitive advantage.

    1. fredwilson

      Yes. I totally agree. The headline is ironic in so many ways

  34. OurielOhayon

    Fred, you definitely have a point but there are 2 major breaks to international monetization with US properties expanding abroad.Most US companies i am aware of do not consider non-US property as strategic, because the notion of critical size usually drags them to focus on the US which is way easier to monetize. This is why local “clones” usually wins, until they get acquired. What i mean is that it is not in the culture of an average US startup to monetize until they realize someone else is doing the job for them or the US local market becomes saturated in terms of user growth and when monetization becomes key.Very rarely you will see a non-US advertiser putting dollars in a site that is not translated. Which is related to the first point. But the real important parameter is that of local critical size and not international critical size. Many sites, like ICQ have millions of non local user but the real question is whether there are local markets where this property is a leader.This is clearly the case for Facebook and for Twitter in a few countries. Specially Facebook. but most of the times those millions of users are atomized in 10s of countries making it hard for advertisers to consider putting dollars into vs local companies that are a lot bigger.

    1. fredwilson

      Right. But facebook and twitter are going to have to deal with this issue

  35. Joe Black

    A bilingual person is someone who speaks two languages.A person who speaks one language is an American.

    1. fredwilson

      So true. I am guilty of that. I can get by in a few languages but I can’t claim to speak any of them

    2. JLM

      “A bilingual person is someone who speaks two languages.”One of which will be English.

  36. Virender Aggarwal

    There is a tremendous innovation happening in the valley but is not reaching the fastest growing parts of the World

  37. Ed

    I agree completely with what you’ve said, and yet I believe that sitessuch as Twitter should have done a far better job in onboardingUS users. Watching in wonder as users defined Twitter should not havemeant ‘never lead by example’ and should not have negated the need to literallyshow people some the inherent values of Twitter.I’d argue that 100,000,000 intense/creative/engaged North American userswould create an extraordinarily vibrant ecosystem, rivaled by no one international demographic.As a business, Twitter’s greatest chance at enduring importance is based on thedepth each user integrates the service with their personal and professional life.I’ve been saying forever. When senior management looks at the masses,they are blinded from the why.It’s not a forest. It’s a lot of individual trees.No roots = no forest.

    1. fredwilson

      I agree with you ed

  38. Kahlil Lechelt

    Great post! I agree. I think because it hasn’t been done properly yet, that there is an immense potential to monetize worldwide. Twitter and Facebook are a standard now worldwide and many people would be happy to spend their money on useful product that they learn of on those networks. It just is labour intensive and you need trusted associates in each of those regions to find out what the best way to sell is in those different countries. For instance in Europe you have multiple mentalities alone. It’s a big task but it would be exciting and highly profitable if done right. It definitely is the future of monetization in my opinion.- Kahlil (from Germany)

  39. omkubera

    Dear Fred,You have a great blog. Most often the comments are worth reading as well.However, at times people with opinions (good or bad – no judgement here) tend to use this as a forum to express themselves (could range from venting to providing researched comments from knowledge / experience – again no judgement).Is there a way you could tag comments that YOU (as the host of this blog) like and find relevant to your intended conversation? In the interest of time, we could then read and edited version of 100+ comments a day. At the end of the day with your blog could come the tagged comments in an RSS feed? Just a thought -Best –

    1. fredwilson

      Its a good thought and one that come up when I started actively using the like buttonI will talk to disqus about that idea

  40. Laurent Boncenne

    I was going to attempt to comment on the post itself, but clearly, It’ll take me a week to read the comments so I’m going to leave it with this :Great post,Culture is indeed important to market into other countries (no matter where you start from). I would personally take the time to embrace the culture before even going into market in a given country. Time consuming, but in my mind, needs to be done that way.

  41. willlytle

    I couldn’t agree with you more about working harder to monetise international traffic. Problem now is that many of the sites are not set up to monetise the traffic outside the US approach. This is where the real work begins.

  42. ciaochouevelyn

    It will be interesting to see how the 80% break-down. While Facebook &Twitter are products of America, “rest of the world” dominate the traffic. Very interesting

  43. KevinForge

    “…international usage cannot be monetized as well as US traffic”. This is just a guess. Most web properties have not even tried. I want an item (doesn’t matter what. Anything they both sell will do). Wal-Mart has it 20% cheaper, and offer faster shipping than Burlington Coat Factory. However Burlington will accept my Visa card issued by a Jamaican bank while Walmart will not. Guess who gets my business? guess which store is higher on my itinerary when I visit America?This isn’t rocket science people. Businesses that turn away customers on whatever pretext, tend to suffer badly and don’t even know why.

  44. Dave Broadwin

    Holding aside the burning issue whether it is pejorative to refer to ” the rest of the world” or not. Your post demonstrates what we all know: that winning technologies include more people and open more possibilities for new uses. To state the obvious, that is why the desktop conquered the minicomputer and why the smart phone will conquer the desktop. (Interesting question where the IPad fits in. I suspect that, like neanderthal man, it will be an evolutionary dead end.) The irony is that, while including more people, Twitter et. al. are going to have to segment them more finely to monetize their opportunity. The good news is that they have the tools to do it.

  45. NICCAI

    Thanks for the post, Fred. The rest of us have been dealing with the US centrism of the Internet for a while, so it is great to see the potential recognized. There is a lot of SCALE out there. The one thing I’ve been thinking about for a while is the number of “free” media services inside the U.S (such as Hulu). In fact, the number of services that aren’t available here in Canada (without circumvention) is staggering. And, today I’m starting to think that these services are loss leaders for media coverage. By making tv, film, books, etc more easily consumable in the U.S. for near free, the American media, blogosphere, internet, can more easily spread word of mouth that is then consumed by the rest of the world for pay.It sounds jaded writing this, but I’ve really be just trying to understand the reasoning. I’m well aware of regional rights issues, but I don’t buy it at face value.

  46. Jay Stevens

    Ultimately, the success and growth of online publishers domestically is a result of budget moving more to direct response and the medium’s overall accountability. The real challenge for the monetization of international/extra-US and Western European inventory has more to do with the absence of two critical ingredients than anything else:1) A mature consumer credit marketplace. Without credit cards, faith in the security of making online purchases, or the availability of other frictionless payment mechanisms, eCommerce won’t take root.2) Perhaps most important, is a cost-effective and reliable method for the delivery of goods bought online. Say what you will about the USPS/RoyalMail/DHL/Deutsch Post/La Poste/FedEx/UPS etc., the reliability and security of these organizations are broadly very good and without this infrastructure in place, goods purchased online don’t have a way to get from point A to point B.Know these sound obvious, but without consumer eommerce spend, online advertising languishes as well.As more brand budget moves online and follows consumer media consumption, these two key components will play less importance, but until then, monetization of International traffic will be a challenge for all online publishers. In the meantime, the most important thing for publishers to do is leverage as many demand sources as available in each market, be they ad networks, rep firms, and even other publishers themselves.

  47. n00b

    Show me the money. Or should that be If you build it he will come.I18n is critical so you can expand to markets when it makes sense. But actually localizing and support countries where you’re not going to make any money? That’s a recipe for bankruptcy. Being the top whatever for Malaysia, for example, gives me a warm fuzzy, but it doesn’t keep the lights on.As soon as the revenue streams appear for the country, any country, the products will follow.

  48. daveevans

    I love that Fred throws out a generic traffic stat and it turns into pages and pages of comments on myriad topics. We Americans are painfully ignorant of the world and more so when it comes to marketing consumer services outside of North America. Translation and localization are increasingly important, and I’m not talking about just adding a link to Google Translate on your blog. Few companies are adept at marketing to different cultures in the consumer web 2.0 world without “boots on the ground” in those locales.

  49. Gabriela

    Only in US phrases like ‘US and the rest of the world’ appear…

    1. MikeSchinkel

      And only in France “France and the rest of the World”; in Italy “Italy and the rest of the world”, in Brazil “Brazil and the rest of the world”, and so on…

  50. Patrick Schoenardie

    Look the world as a trend implementation tool!

  51. J. Pablo Fernández

    At Hear a Blog we are pushing those concepts by allowing advertisers to target geographically in audio ads. We wrote about it on http://blog.hearablog.com/2

  52. Seth Bindernagel

    Hi Fred, I read your blog regularly and was happy to see you posting about the importance of taking a product global. I am the Director of Localization for Mozilla, working on the Firefox release team. When we released Firefox 3.5, we had 75 localizations of the browser.The amazing thing about localization is that it is 100% volunteer driven. This strategy is highly leveraged, community-driven, and (we think) a way to distribute authority to the edges in a truly free/open source process.It’s important to note that localization is not just string translation, as some marketing folks might quickly think. As I just mentioned, we rely a lot on volunteer contribution. (Here’s a quick technical interlude, skip to next paragraph if you don’t care…) That means, our localizers not only translate the strings inside the code, but they also tell us what search providers to include in the search drop-down in the top right corner of your Firefox browser. They also tell us what default RSS feed we should ship locally. That small piece of technology is located in the bookmark bar, and if you use Firefox, you’ll see this as the “Latest Headlines” section that shows all the latest headlines from a local news source that the localizer has suggested. The localizer also tells us what “protocol handlers” to ship. These are the pieces of the browser that allow you to click on an e-mail address and have the best local web-email options pop up in a preference dialogue asking a user what he or she might like to use. For example, in the English-US version, we offer Gmail and Yahoo! mail. Lastly, we have web-based RSS feed reader applications that we wire into the browser for a user to select when choose to track an RSS feed. The localizers also translates ALL of our marketing content for us. This included customized landing pages in locales to offer the best download, creative marketing campaigns around interesting events, and even localized collateral for community marketing events.You can see that localization at Mozilla is so much more than just translation.I could go on-an-on about how look at localization at Mozilla. It’s all an attempt to get to the local user in a meaningful way. Nearly 75% of our browser users (nearly 400 million worldwide) are NOT using an en-US version of Firefox. Indeed, the highest growth we see is in places like Indonesia where we saw 180% in our user base last year. In that market, we are ~60% market share. And, it may seem surprising to you, but our annual global marketing budget is a single digit percentage of what some of our competitors spend on marketing the release of their browser. It’s shoe-string and powered by the community and we have roughly 25% global market share (and growing).The fact that we do this with local volunteers is also one way to strategically enter new markets. The key has been to be radically open. I work with my team to hand over the keys to very trusted volunteers who have worked with us a long time to establish a trusted relationship. A lot goes into testing an vetting those contributors, but once we find them, they stick. I wrote a long article for an online magazine about this. Check it out here:http://olex.openlogic.com/w…Lastly, and I saw a bit of this as fallout in the comments on this very post, bringing a product to a local level takes some cultural curiosity and investigation to prevent any insensitivity that might tarnish an attempt to enter the market. The worst outcome would be to be perceived as insincere or just another ignorant American if you somehow miss what might be perceived as a cultural nuance like using a term “rest of the world”. For instance, associating with country boundaries or flags in our UI wouldn’t win us any fans in the Catalan region of Spain (nearly 500,000 users). Our Kurdish localization community probably wouldn’t last long if we somehow lumped them into West Turkey. And our Macedonian localizers would probably be really pissed if we called them the former Yugoslavia. To get real penetration, it seems like some time well spent is to look at what is going on at the local level and try to make the best cultural entry as possible. I write a lot about localization on my blog here:http://blog.mozilla.com/seth

    1. fredwilson

      great comment seth. thanks for stopping by and sharing that with us

  53. Guest

    Step 1: Localization – language, language, language…Step 2: Localize your developer program (please say that you have some kind of service platform and developer effort).Step 3: Promote the hell out of the developer program – puts money into the market, drives employment and generally starts the advertising and online sales processStep 3a: If you are in an ad supported environment – start building an local ad rep infrastructure and services network. Let other people sell and teach the market to buy.Step 4: (Really should be doing this all the time) Metrics. Look for patterns in the development onsite, look for copycats offsite.Step 5: Consolidate anything that looks like a “killer ap”.Step 6: Test killer ap in adjacent markets – e.g. if it works in Taiwan, chances are high that it will work in China, Singapore and probably Malaysia…