Fred Wilson had a very important post last week, examining the non-US growth of a few web properties, and concluding:
There's a lot of money "rest of world" and I suspect that will only be more and more true over time. So we should start building web businesses with that in mind.
The topic is very relevant to my business thesis, so i have been thinking about it over the weekend. At the heart of the discussion is the notion of global web businesses. The thinking here is pretty linear. In capitalism, most businesses enjoy economies of scale. In the connected, digital economy, since most physical points of friction are eliminated, the economies of scale allow for significant economic advantages to the largest players. Therefore, it's natural to see large, global, dominant players emerging. Fred is saying that these players will eventually have their non-US markets larger than their US markets and should behave with that in mind.
It makes a lot of sense. And, we're already seeing this in action with Google dominating search in most countries, and Facebook killing all sorts of local social networks that preceeded it at the local level.
Is there not a segment of internet business that is inherently local? I think there is. And the secret sause there is cultural. eBay has een very acquisitive in its global expansion. However, the eBay acquisitions always come with their unique local flavors. It's in the community if not the product but all auction-based local ecommerce businesses I have seen have a unique cultural component. The same is true for dating services, classifieds, recruitment sites...
I think it's very difficult to build, from scratch, a truly global service, except in pure technology-driven ventures (such as search, as in Google, or VoIP, as in Skype). Each company is built with its own cultural unique points and then, as they expand globally, adopt or acquire practices that fit into other cultures.