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Comment by tribune | Hacker News Reader

Google (and especially Facebook) are reaching a point a where they need these next billion, and the billions after that if there's anyone left, to grow their businesses. I would wonder about the financial value of these new users to the companies, though. I don't mean this in a disparaging way, but the first billion users are FAR more valuable to them than the "next billion" described in this article. Their revenue models are based on advertising, and the first billion live mostly in developed countries with have high spending power, and are therefore worth more to advertisers. The "next billion" may be part of an emerging global middle class, but currently and for the foreseeable future will significantly lag the first billion in purchasing power and therefore dollar value to advertisers.

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Right now yes. This is more about capturing the future market. If Google or Facebook can establish an effective Monopoly on the growing market, they are likely to retain their monopoly as the economy develops and their next billion users gain spending power.

What you're saying is true today, but not in the future. China's GDP is expected to surpass American GDP in the next decade, and India will follow suit in another ~3 decades. The combined South-American/African markets will likely surpass North America in the 21st century as well. Not because of any special merit on their part, but simply because their population exceeds America's by a factor of 3-4.

If you're a company like Google, that is well established to last for another couple decades, you'd be foolhardy not to ride this massive wave.

3 decades ago the Internet didn't exist. 2 decades ago Google was a project in a basement. A decade ago smartphones were still thought to be a fad. Trying to predict tech trends 3 decades from now seems a tad foolhardy.

Population is not a tech trend.

> China's GDP is expected to surpass American GDP in the next decade, and India will follow suit in another ~3 decades

Right but aggregate GDP is not as important to these companies as GDP per capita.

> If you're a company like Google, that is well established to last for another couple decades, you'd be foolhardy not to ride this massive wave.

Actually I'm pretty sure the big tech companies can make most of their revenue from high GDP-per-capita users. Not saying this is the moral choice, but financially I'm not sure that these less wealthy users will move the needle appreciably for the giants.

Sure, one wealthy consumer is more lucrative than one less-wealthy consumer. But what companies really care about is market size, which is number-of-consumers * per-customer-value. Ie, aggregate GDP. This is why Walmart is worth so much more than Macy's, despite their customers having a much lower income.

For any business, expanding to new markets is as important as building new products. New markets bring new challenges and overcoming new challenges in turn improves the product.

For example - Offline maps feature which Google built for India is now used all over the world and turned out to be a very useful feature.

>Google (and especially Facebook) are reaching a point a where they need these next billion

Except the next billion is already using Weixin.

They are so concerned because they see that the next 1B is the only remaining userbase reserve that can possibly feed their probable contender.

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