

Does Rest Of World Matter More Than The US? - salar
http://www.avc.com/a_vc/2010/03/does-rest-of-world-matter-more-than-the-us.html

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adamt
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.

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hga
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.

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adamt
> 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>

~~~
hga
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....

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cstross
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 ...)

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dejb
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.

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a-priori
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...](http://www.google.com/publicdata?ds=wb-
wdi&ctype=l&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:USA&tdim=true&hl=en_US&dl=en)

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.

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

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gyardley
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.

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akie
Of course it does.

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nonce
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.

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

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dabent
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.

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

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dabent
What?

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ugh
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.

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Locke1689
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.

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

