Does Rest Of World Matter More Than The US? | Hacker News Reader

Does Rest Of World Matter More Than The US?

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21 pointssalar20 comments

Quoting from the final para of the article: There's a lot of money "rest of world" and I suspect that will only be more and more true over time.

I generally really like Fred Wilson, but talk about stating the obvious. Given that the EU has a greater population, a higher total GDP, more broadband subs and equivalent or greater broadband penetration than the US - it also sounds a bit patronising. And that's before one considers the BRIC countries, or the rapidly developing internet economies in places like SE Asia.

There are unfortunately still people to whom the part you quoted isn't obvious, and who think the rest of the world is a pain in the ass rather than a very big opportunity.

Something more than a quibble: while the EU has a higher total GDP, that doesn't translate into a higher purchasing power or standard of living---which can get complicated. If some higer ticket items are simply out of reach, maybe there's better markets for stuff people like us sell.

To do this correctly, you need to look at what the markets for X are in a particular country or region.

I'm also appalled with two p's that the author is invoking the "Chinaman" sales fallacy. Once upon a time it was through that China had vast importing potential, for if you could get just 1% of its men to buy a wool suit, you'd be minting gold.

Of course, that ignores the minor detail of why anyone in China would desire a wool suit, let alone be able to pay for it.

Anytime you hear someone say "if we could get just XX% of this market", remember that each sale is made one at a time, and that those individual sales have got to make sense before you can get wild eyed with percentages and big numbers.

> Something more than a quibble: while the EU has a higher total GDP, that doesn't translate into a higher purchasing power or standard of living---which can get complicated.

In terms of GDP and purchasing power parity, then Wikipedia says:

* US GDP (PPP) = $14.26 Trillion (2009) [1]

* EU GDP (PPP) = $15.26 Trillion (2008) [2]

[1] http://en.wikipedia.org/wiki/Economy_of_the_United_States

[2] http://en.wikipedia.org/wiki/Economy_of_the_European_Union

And when adjusted per capata, based on the above Wikipedia articles for the EU, with the US population from the US article for 2010 (i.e. it's high for this calculation):

US GDP (PPP) 14.26 Trillion / 308,951,000 = 46,245 US$

EU GDP (PPP) 15.26 trillion / 498 million = 30,643 US$

Not a small difference....

The USA, at 300 million people, is only 5% of the planetary population (over 6,000 million people).

Even if you discard huge chunks of the developing world as not a reliable market, you've got 500M people in the EU, 200M+ in the developed Pacific Rim (Japan, SK, Taiwan), 300M middle-class Chinese, and so on. It probably adds up to 1-1.5Bn developed world citizens.

For a 5% minority, the USA punches above its class at 20% of traffic ... but in the long term, hopefully it will trend towards only 5% of traffic. (I say "hopefully" because that'd indicate the rest of the world was at the same average level of connectedness ...)

Since the article is about monetisation I'd say GDP would be the best importance metric to use. I believe the US is around 25% of world GDP.

A quarter is about right (it's 23.4% as of 2009). What's more interesting is the graph of US GDP and world GDP:

http://www.google.com/publicdata?ds=wb-wdi&ctype=l&m...

In the 80s, the US sat at about one-third of the world GDP. Something happened in 2002, and since then the world GDP has been skyrocketing relative to the US.

That graph is in US dollars. If you look at a currencies graph, it should become clear what's happened in the past decade.

If that's the situation look at Germany population of 81 million or Japan population 127 million (Wikipedia).

Germany has the fifth (CIA factbook) largest economy in the world and Japan is third.

Japan has a very high percentage of elderly who probably don't work so Japan's workforce may only be half or a third of the population (excluding babies, children, prisoners etc). That's pretty humbling when compared to 300 million or China's 1.2 billion, of course adjusting for elderly, children too.

It depends on the stage of your business. A young American startup with limited resources should focus on getting the product right before it starts worrying about localization and monetizing international traffic.

Of course it does.

By what standard?

Monetization? Can you show that international traffic monetizes at 25% US?

One of the problems with Fred's sample is that those are all free services. When money is involved you find your populations don't trend like that at all (as Fred should know). Let's ignore that for a moment.

Three of the top four international users of Google are BRIC countries. BRIC has a per capita GDP of about 7% US. At that level they probably monetize well below 7% US. If I have a hard time making ends meet am I going to spend the same proportion of my income on virtual Facebook gifts as you? Now ask yourself, if you run AdWords, do you want to pay the same price for a click that comes from India?

Or perhaps you are suggesting foreign countries matter more because they have more people? Not much of a conversation there.

I'm pretty sure Europe monetizes similarly, if not slightly better than US traffic FWIW.

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.

Is your reticence in naming certain countries a voluntary adoption of their censorship policies?

What?

I’m really surprised that something as distinctly American as Facebook could enter the German market with the force that it did. Germany had its own very successful Facebook clone long before Facebook started its international push but Facebook is so far fighting a very respectable fight (13M vs. 16M visitors).

I wouldn’t have guessed that. I really wouldn’t have thought that Facebook could be as successful in Germany as it is. I don’t know whether that means that the rest of the World matters more for Facebook than the US – but there certainly seems to be enough room abroad to be successful.

Well, yes, but if you can hit the US, the UK, Australia, and Canada in English, it does make English the most important language. That is, English is not greater than all the other languages, but it is greater than any other single language.

How long will this last? I don't know -- probably until China and India have proportional GDP spending.

India is the great hope for native English speakers who want their language to remain dominant.

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