Who's the Google of social networking sites? The obvious answer may seem to be Facebook, given its rapid growth, successful cooperation with application developers, and ever-smarter ad targeting. But by some measures, the real answer is even more obvious: Google itself.
This week, Google is drawing attention to its often-ignored social networking site, Orkut.com, with a redesign intended to prettify the site's Spartan look. And attention is deserved: Despite its low profile in the U.S., Orkut now draws 38.2 billion page views a month worldwide, 7.8 billion more than Facebook, according to comScore Media Metrix.
In Brazil, where Facebook and MySpace are virtually unknown, Orkut has become a smash hit, with 15.6 billion page views monthly, by the count of Nielsen/Net Ratings. That kind of popularity doesn't just dwarf Facebook's Brazilian traffic, which is practically nil; it's also nearly 10 billion more monthly page views than Facebook draws from Americans.
But a bigger question than the cause of Orkut's popularity is the site's potential for profit. Facebook will earn more than $100 million this year, according to one of the site's investors, Jim Breyer of Accel Partners. And with the right advertisers, Orkut's Brazilians and other foreign users could also be a significant source of revenue, argues Greg Sterling, a consultant with Sterling Market Research. "If you've got the ad coverage, an international user is as valuable as anyone," he says.
In fact, Google's foreign advertising coverage has been spreading. The company's revenues from sources outside the U.S. and Britain, earned almost entirely from selling targeted ads, amounted to $1.24 billion last quarter, nearly twice the number from just a year ago. That brings the percentage of Google's foreign revenue to 60.8%, up from 46.7% last year.
While that spending might make Orkut an unlikely "heavy-weight" of social networking, as blogger Michael Arrington recently wrote, the site will need to gain a much larger U.S. audience to compete long-term with networks like MySpace and Facebook. MySpace still leads the social networking market by a large margin, and Facebook tripled its audience.
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