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After a billion, what's next for Facebook?

Not complacent at a billion users, Facebook is parachuting into markets all over the globe. But overseas growth that once seemed to come so easily is slower now.

December 01, 2012|By Jessica Guynn, Los Angeles Times

In October, Facebook Chief Executive Mark Zuckerberg traveled to Russia, Europe's largest Internet market, to meet with Prime Minister Dmitri Medvedev. Facebook also cut a deal with one of Russia's mobile phone operators, Beeline, to provide a free Facebook application to subscribers. And Facebook is making headway in South Korea, where it's battling local social network Cyworld for the time and attention of people there.

In Japan, Facebook has pulled off its biggest coup. Even as Facebook took hold in other parts of Asia, it grew slowly in Japan, where people aren't as comfortable sharing personal information — even their real names — on the Internet. Local social networks such as Mixi allow — and sometimes encourage — the use of pseudonyms. The earthquake and tsunami in 2011 changed a lot of minds about the value of using real names on the Web as Facebook became an important tool to reunite families and disseminate reliable information in the disaster's aftermath.

As of September, Facebook had amassed 18 million users in Japan at the expense of local social networks and Twitter. Facebook Chief Operating Officer Sheryl Sandberg touted the social network's growth in September when she traveled to Japan to target the country's massive advertising market.

Facebook's toughest challenge by far is that it's cut off from a third of the world's population. The Chinese government, which censors most major U.S. social media websites, has blocked Facebook since 2009. It's a major blind spot for a company intent on global domination. China's more than half a billion Internet users spend a huge chunk of their days on Chinese social media sites.

Zuckerberg has said he would like to find a way to enter China, but even with the recent leadership change there — ushering in the Chinese Communist Party's first new chief in the social media era — most analysts say it's unlikely.

Many investors are far more interested in how Facebook plans to cash in on the users it already has than how it plans to sign up more of them, especially in poorer parts of the world where it will be much harder for Facebook to make money.

"Does getting to 2 billion users matter? The answer is no," Pivotal Research analyst Brian Wieser said.

Gleit says growth isn't just a numbers game. Her team focuses on building products that encourage users to be more active on Facebook and spend more time there. Last year Gleit took the lead on a popular feature that lets users subscribe to News Feeds without having to become Facebook friends.

Those kinds of efforts are crucial especially in markets where Facebook's growth has slowed just as the company comes under intense pressure from Wall Street to ramp up its advertising business.

"I have this deep faith in the power of the vision and in the impact we can have," Gleit said. "We still haven't achieved anything near what I think we can."

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