A universal truth in the social network space. Unfortunately, not even FB can really extract much value outside of North America.
In all of advertising. Non-US users remain extremely hard to monetize across the board.
America has the benefit of decades of intense consumerist propaganda to fend off the evil reds, while the biggest emerging markets are often very vocally against "Capitalism" (even if they would all love to own iPhones)
This is an anecdote, but I was looking at developer jobs in Europe and the salaries are pathetic. 65k Euros for a senior engineer with a 50% tax rate? Are you fucking kidding me? I can make 250k in the US at a 35% rate. It’s absurd.
No wonder Europe has a brain drain problem...
Any reference to the european "brain dead"-problem?
https://voxeu.org/article/european-brain-drain is fairly comprehensive, but the idea is that highly skilled people generally go where they're paid the most for their skills.
I'm guessing you mean brain drain. Or is there a Creutzfeldt-Jakob disease epidemic that I missed? : )
Besides the northern countries, the tax rate is not 50%. Most countries either have a flat rate that is well below that or have a system where you pay in boxes. Like %30 over the first 20k, then %47 over the remainder etc. On top of that, many countries have countless schemes that result in tax deductions. Like owning a house gets you a discount.
In almost all cases, the effective tax rate falls well below 50%.
a) Money. Most places do not have a lot of surplus wealth, and only a few places in Europe do. Consumers need to have extra money to spend on 'stuff' beyond the very basics, i.e. a consumer oriented economy for a lot of ads to work.
b) Fragmentation. This is a two-sided problem. Most countries are very small, have their own laws, regs, and networks for everything that are very established. So the unit cost of marketing to advertisers etc. is going to be higher. And things move slower in most places.
c) Behaviour. American culture is pop culture. Sometimes it's hard to explain that one. Americans move according to trends. Social mores change quickly depending on whoever has the biggest megaphone: news, broadcasters, even advertisers. It's a place where commercial interests drive aspiration, even morality - witness the amount of virtue signalling in ads, i.e. Nike's recent campaign etc.
W. Europe, the other lucrative market - they are really traditional in their ways. They already have their day full of things to do. Germans leave work at 5 and go and drink a specific kind of beer at the local pub. They play certain kinds of sports. They buy certain things. In the UK, I've been to 'rich people's' homes and they have these ancient toasters. But they work! They don't just 'buy new stuff' it's not part of their culture. It's the same in most of the rest of the world.
The rest of the world is really just not designed as a big commercial vehicle.
Digital advertising becomes more valuable the better you are able to track digital intents/impressions/sales through all your channels.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
Moreover, you have to understand why PPP exists in the first place. Let me give you a hint: it has to do with arbitrage.
Being 40% bigger can qualify as “far bigger”.
The point of my reply was that saying that the US has more money does not explain the fact on why people in the US pays more for software than in the rest of the world, which I believe is the key issue when it comes to a social network ability to monetize international markets. You have rampant software piracy in Latin America, Asia and Europe. At least in the EU, things are better for business software. China is so notorious for piracy that a former head of Microsoft R&D for China said: "In China we [don't] have problems with market share. The issue is how do we translate that into revenue.".
Nowadays software companies in China have found success by giving away free games and selling coins and whatnot. So my whole comparison was that if China has a bigger economy (or smaller/similar if you feel offended by that fact), then how do you explain that even large companies like Microsoft are struggling in that market.
Source?
http://worldpopulationreview.com/countries/countries-by-gdp/
United States 21,410,230
China 15,543,710
All those organizations you mention all agree USA is still on top for nominal GDP.
I unfortunately think you’re projecting with the people getting offended bit.
So you are right with the nominal distinction, and if I was wrong about that, then the downvotes probably reflected that more than any opinion of mine.
Of course you don’t need all the people in the country to have (disposable) money since their populations are so big.
And companies like PinDuoDuo in China have shown they can become $30B public companies with a profit in 2 years by mainly targeting poorer or more rural Chinese.
Unfortunately for whom?
If the company monetizes, but in ways that the citizens don't like, they can choose to not use services provided by the company. If they agree with the monetization practices being adequate in exchange for the services provided, they can use the services. Whereas if the company doesn't monetize in the region, they can't afford to provide services anymore, then even those people who are totally cool with the monetization strategy cannot use the services.
TL;DR: if you don't agree with the way a service is monetized, you are free to not use it (obvious limitations apply for things that are essential to living in modern society, like internet or banking; FB doesn't fall under this). Just because you are not ok with the cost associated with using that service, that shouldn't serve as a solid ground for denying service to those people who accept the cost.
For example, about 10 years ago, Google higher market share in Europe than in America. It was something like 95% in Europe and 90% in the US. I wouldn't be surprised if that's still the case.
Of course Google's not a social network, but my very limited understanding says that Internet products generally translate well from America to Europe. I'd be interested to know where that's not true!