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The European Tipping Point for Facebook

Facebook is a household name in America, but the same can’t be said of other countries. Many countries have other competing social networking websites that outcompete Facebook. This is understandable because the culture differences from country to country can cause many problems. However, one could argue that the most effective social networking site isn’t the one with the best features or user experience, but rather the one with the largest relevant following.

In the linked article, Marshal Manson, CEO of Ogilvy PR UK and EMEA Senior Social Strategist for Ogilvy & Mather, discusses the tipping point of Facebook’s penetration into European markets. He specifically analyzes German and Dutch markets to see how Facebook measures against its European competition. In Germany, the main social media is StudiVZ. StudiVZ is an abbreviation of Studentenverziechnis, a German expression which means students’ directory. Similar to Facebook’s origins, StudiVZ targets college and university students in Europe and is based in Berlin, Germany. In October 2010, StudiVZ was getting 360 million monthly visits. However, after Facebook reached 48% of the German population, StudiVZ’s visits dropped 53%. As of April 2011, there were only 189.2 million visits to the Berlin-based website. A very similar phenomenon occurred in Dutch markets. Hyves is a social network website founded in 2004 in the Netherlands that targets the Dutch population. In May 2010, Hyves boasted 10.3 million accounts, which correlates to roughly two thirds of the Dutch population. However, when Facebook reached 48% of the market, monthly visits to Hyves declined 31% and monthly visits to Facebook increased 154%. A common thread seems to be that when Facebook reaches around half of the population, there is a dramatic increase in Facebook monthly visits.

When looking at this through the lens of our networks class, we can apply the concept of network effects and tipping points as discussed in Chapter 17 of our text. The tipping point in this case would be 48% because once Facebook reaches 48% of the population, we see that it gets widely adopted in the European markets mentioned. We can assume that if under 48% of users adopt Facebook, the payoff is not worth the time invested into Facebook. However, once it reaches over 48% we can infer that the payoff is worth the time invested into Facebook. So worth it, in fact, that it exceeds the payoff of competing local social media sites.

 

http://www.edelmandigital.com/2011/06/09/finding-the-network-effect-tipping-point/

 

 

 

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