Recently, I was invited by my collaborator, Assoc Prof Michael Netzley from Singapore Management University to speak to his students on the course module “Digital Media Across Asia”. The talk focus on a basic introduction to social networks and its applications to corporate communications for his students. While putting the whole talk together, I wanted to bring forward a couple of insights thru the observations and analysis (with Michael and Nicholas Khoo) that I have done on a couple of social networks in Asia, for e.g. mig33, QQ, CyWorld and demonstrate what a good set of best practices will be. We also tried for the first time do a recording of the talk and it allowed me to learn how to integrate as a slidecast on Slideshare.

A couple of things which I like to elaborate as we did not manage to steer the conversation during the class if you have heard the slidecast:

• Online vs Offline engagement: One of the lessons which I wanted to steer the students to think is the issue of how to merge the online and offline worlds in terms of user engagement, discovery and interaction. We discovered that the success of social media tools did not come from the platforms trying to gain users by online invites. Instead, their approach also utilized an offline strategy. RenRen (formerly Xiaonei), the facebook clone in China, adopted a direct marketing approach by offering offline incentives such as free food and drinks to draw classes from universities and schools to sign up to the social network. In a similar social media marketing conference which I spoke as a panelist recently to brand-marketers & small-medium enterprises, I explained a similar approach used by the Right Spin (a PR company) who created the HTC flash mob event in Raffles Place. Basically, they got a group of people who burst into dancing that caught the public perplexed and at the same time, uploading tweets, photos and videos into various social media platforms that spread the word around quickly.
• Facebook has beaten CyWorld for the South Korea in early 2010: A new datapoint emerged in the beginning of Jan 2010. Facebook, in a very stealth way, has just displaced CyWorld to be the top social network in South Korea. This is probably the first crack in the East Asian bloc where a foreign social network has successfully toppled the incumbent. What is the reason? One probable reason is that a lot of Korean users are playing social games or tapping 3rd party applications on an open platform which CyWorld has not deployed out yet. I probably wanted to pose the question: is the beginning of a domino effect that may hit Japan soon given Mixi and Gree are in dead heat for the 1st place?
• Can the micro-transactions model work in Western based social networks?: We know that Facebook is now on the verge to deploy a beta-tested version of micro-transactions in the platform. The question as posed in the discussion by one of the students during my talk: does reverse engineering of an idea from the East will work in the West? I probably think so, given that Silicon Valley have been holding a lot of conferences of virtual goods and currency and talking about these models which are successful in the Far East. In fact, with the help of the mobile smartphones like the iPhone and Nexus One, it may be the beginning of an era where Western social networks may successfully monetize in their own homeground.

Related posts:

1. Building Online Communities & Social Networks: Strategies, Tools and Trends in Chinese
2. The Importance of Being Social – A Talk on Online Social Networks
3. Top 3 Social Networks in China after QQ

Google has released an interesting statement today that in light of cyber security, they have decided not to censor search results on Google.CN and accept the possibility of shutting down the entire business operations if the Chinese government will not allow them to operate an unfiltered search engine. With a multi-national company of such magnitude having the possibility in moving out of China, what are the implications that one can explore in the realm of business? I will draw a couple of thoughts from history to examine this event.

In the light of Google’s action to take on the Chinese government, we see that the shares of Baidu have gone up and also a lot of chatter in the Chinese blogosphere that Google’s retreat is motivated by the loss of her former CEO, Lee Kai-Fu and dwindling market share in the Chinese search market share. While it is easy to chastise Google who have given up some of her principles to set up in China four years ago, we should also applaud that Google has the audacity to try to work within the system and for the first time, standing on their principles. Yet, business is still business. What does Google’s retreat from China really tell us?

The first is the difficulty of foreign internet companies making a headway in China. As one of the well-known Chinese web entrepreneurs once commented to me in a confident manner, there is no chance that any of the US Internet based services from Facebook to Twitter to dominate the Chinese market. There are two supporting reasons to his claim. The first is that the multi-national companies do not want to localize their operations and prefer to replicate their model in China than adapting to it. The second is that the Chinese local Internet companies will put more than 100% to take on the giants from US. Looking at Microsoft, Google, Yahoo!, eBay and MySpace, it does not look favorable for them to enter the Chinese market at all, but to let the Chinese market replicate their stuff. While the era of cloning is over, the real competition is now between US and China in making innovations for the web-tech space. Is it a question of culture and context that made it difficult for these Western companies to enter the market? Is it nationlism that emerged victorious in seeing how Google being battered by Baidu in the Chinese market?

That comes to my second point. It concerns the whole optimism about the rise of China as a superpower and many including myself sees Zhong Guan Cun as the only viable alternative to Silicon Valley. While the Chinese government maintains a very heavy handed approach against activists and making it tough for foreign companies to enter into this emerging market, we also see that the culture of openness and freedom of speech are challenging China once again.

Can the Great Firewall of China stands the test of time? I have a friend of mine living in China once touted China as a rising dragon and see the financial crisis happening in US as the signs of decline for the western power. I countered with a historical argument that the optimism with China may not turn out what we hope to be. I will give one comparison. In the early 1970s and 1980s, we see Japan as a counter rising superpower that seek to end the dominance of US with their success starting from cloning the US companies in the automobile industry and then moving into innovation and creativity that might allow them to leapfrog the Americans. But what do we see in the end? Japan failed to catch up with US for different reasons. Japan failed because the traits of creativity and innovation clashed with a hierarchical business culture. What these rising powers failed to see, is the way how the US bounced back from failures, starting from a recession in the 80s and headed into the roaring 90s with the creation of the Internet. While creative destruction happens so often in US, their democratic culture works hand in hand with the innovation and creativity culture, while the values of the Chinese culture counter that. Probably a disruptive technology in the US is in the making and before we know it, the Chinese move backwards again like the way how Japan did in the 1980s.

My opinion is that Google has lost on the business aspect in China but won a moral victory albeit the type of hand that they are given. So, the Google vs China creates a clash of values between two civilizations. Who will dominate in the end and come out swinging? We should leave this discussion to a decade later and see where we are then.

Related Links:
[1] George Codula, Google likely to retreat from China.
[2] China YouRen, What is going in with Google (2): consequences.

Related posts:

1. Top 3 Social Networks in China after QQ
2. 3 Reasons Why Google is launching the Chrome OS
3. An Opinion about Singaporean Business Culture

Should Facebook set up an Asian HQ via establishing a presence in Southeast Asia? With recent statistics from Alexa, ComScore and O’Reilly Radar that demonstrates Facebook’s dominance as an online social networking site in the Southeast Asia market and a drip down effect into India, Cambodia and Vietnam, we provide the reasons why they should do so and the strategies how they can tackle a fragmented market like Southeast Asia.

Sometime back, I broke the news regarding Facebook has almost conquered the whole Southeast Asia market with the exception of Thailand and Philippines. Now, the whole Southeast Asia is overtaken by Facebook (via the Alexa rankings within each country except Thailand). Note that Friendster has lost their last bastion in Philippines. It is a feat that Facebook has conquered a market which they have not set up an official outfit. After all, the whole Southeast Asia market is fragmented, unlike the lucrative markets in India (still held by Orkut but Facebook is gaining traction with them last year) and China (where pundits like my friend Gang Lu just tell Facebook to forget going to China given the dominance of the local social networks and also the difficulty with government regulation as observed with Google China and MySpace China). To be fair, Friendster was the first social network which set up here in Singapore but they have run into difficulties where the problem does not lie with regulation based on other factors from business models to hiring the wrong people to who are established in their industry but not on social networks. Here are some thoughts on why and how Facebook should come to Southeast Asia.

Why Facebook should come to Southeast Asia

There are good reasons why Facebook has not set up a presence in Asia. First of all, they are not familiar with the market in Asia. Second, they are seeking a monetization model that can allow them to grow quickly like the way how Google has done with their online ads model. Most business strategists will suggest Facebook to tap into the East Asia markets which are heavily dominated by local players because they are seduced by the scale of the market. Who can argue against China’s 550M internet users and the success of QQ as a social networking and instant messaging tool? The problem is that Facebook will have to cope with the tight regulation in the Chinese market (given how many times they have turned off Facebook in the split of the second if any political incidents happened). Even if Facebook ignores the Chinese market and goes for the Japanese and Korean market, they are of no match against Mixi or Gree and CyWorld‘s business models of utilizing the high mobile penetration rate in these countries and micro-payments. Benjamin Joffe’s analysis of QQ provided an interesting ratio 8:1 for the revenue generated in QQ are paid by the consumers by mobile or micro-transactions using virtual gifts or games to by online advertising. So, there is not a tight fit unless Facebook finds a model that can harness this form of revenue generation methods.

However, there are interesting lessons to learn from the failures of other Western social networks for e.g. MySpace and Friendster which Facebook can learn from in order to expand into Asia. They are good examples because MySpace showed how difficult for a social network to penetrate in a market where local players are very strong in the East Asia market, while Friendster conquers the whole Southeast Asia market and yet unable to build a sustainable business model because all the users have started to migrate to Facebook.

1. MySpace: MySpace is a good example of a social network which tried to enter into the East Asia market (Korea and China). There are two reasons why MySpace falter in those countries. The first relates to the earlier point I made about online micro-transactions. Let’s look at Korea first. The convenience of paying small gifts in CyWorld and the flexibility to pay for small improvements to the user generated account. The “Minihompy” phenomenon in Korea underlies how Koreans pop artistes and politicians have used CyWorld as the platform to promote their latest hits or policies. MySpace Korea suffers from what makes them strong in the US market when it comes to Korea. What about MySpace China? In fact, MySpace China could not mount a serious challenge to the other Chinese networks that ranked after QQ (51.com, RenRen and Kaixin001). The Chinese based social networks tapped on getting the users to pay for VIP privileges (as if they are running a private club) and virtual gifts and made MySpace’s online advertising model virtually useless. A easy way to think about this is the following: micro-transactions generates traffic and traffic complements online advertising. The power of online advertising can be multiplied by consumer interactions within the social network if some form of virtual economics are running in the background.
2. Friendster: In some sense, the Southeast Asia market resembles Europe that it is a very fragmented market marked with different languages and cultures. Yet, if you examine Facebook’s dominance in Europe, you realize that Facebook is just as widely adopted in both regions. One should probably ask Facebook the question, “Since you have set up Facebook in Europe via United Kingdom, why not the same with the same approach using Singapore for the entrance to Southeast Asia? Friendster caught on the first wave of social networking fashion in Asia and got an exponential growth of users.
   
   How did it falter so badly today? Two important factors led Facebook superceding Friendster. First, Facebook offers a better design interface, and most importantly, an opportunity for early adopters to work with the open platform and create apps on the network. Probably, I will use Singapore as an example. In early 2008, there are only 300K users and by today, 1.2M users. The first tipping point of Facebook for Singapore happened in March 2008 with the first Facebook Developer Garage followed by the mainstream press publicity that surged the network to its prominence. By now, there are already 3 Facebook developer garages events and the developer events spread to Malaysia and Indonesia through grassroots movement (via E27 and SGEntrepreneurs), and also with developers from the surrounding countries (Malaysia, Indonesia) coming to Singapore for the events. Contrast this to Google Singapore which was set up in 2007, but the developers communities on Android and Maps are only starting to happen in 2008. Second, online advertising is a dominant model in Southeast Asia as compared to their east Asia counterparts. The Southeast Asia market is not very adapted to the micro-transactions model via mobile payments (with strict local national telco companies in control) or the high rates that require users to do micro-transactions. In some sense, Friendster did not have a mobile app except in the Nokia Ovi Store, whereas Facebook app in iPhone and Nokia N97 are heavily utilized by the users owning smart phones.

The important question to address is why Facebook should come to the Southeast Asia market. Three factors come to mind:

• Strong local market online presence in Southeast Asia: If you look at the table I have presented the Alexa ranking of Facebook in three categories: (i) Southeast Asia comprising of Brunei, Indonesia, Philippines, Malaysia, Singapore and Thailand, (ii) Greater Southeast Asia with Vietnam and Cambodia and (iii) India (which is especially closer to the Southeast Asia gateway). MySpace has established presence in India but failed to harness any form of strong market challenge against Google’s Orkut and Facebook. In the table, you will note that Facebook is number 7 in Thailand and Vietnam and number 5 in the India market (close to Orkut). In these countries except for Vietnam (Zing.VN), the local social networks have not reached the reach and coverage in the same order of magnitude like Facebook and Friendster. One can also look at presentation from Ben Lorica from O’Reilly Radar on the demographic trends for adoption of Facebook in Asia where the rate of change for new user growth in Indonesia and Philippines are about 190-200%. India and Vietnam trails with 50% and 71% after these two markets for Facebook user growth.

• Convergence of Language, Culture & Business Models: Online advertising remains to be the most dominant business model in these countries. In fact, the success of East Asian social networks of utilizing micro-payments or mobile payments are totally invisible to this market. Given most countries descended as former colonies of Western powers, these Asian countries maintain a more cosmopolitan population that follow the trends in the US and European markets. Most of the top media buyers are located in Singapore (or Hong Kong) and expand out to the rest of Southeast Asia via this gateway. Companies beginning from the humble origins of Facebook developers have successfully monetized, for example, Tyler Projects with their BattleStations and Mafia Empire are beginning to create an industry of social network games within the region.
• Domino Effect into India and Greater Southeast Asia market: It is known that Facebook has a surge of 1M users in first quarter of 2009 in India, meaning that there is some form of domino effect taking place. This has already happened in Southeast Asia earlier, when Facebook started spreading from Singapore to Malaysia, Indonesia, Brunei, Thailand and Philippines in a rapid manner and eventually superceded Friendster as the dominant social network.

How to make Facebook work in Southeast Asia

How should Facebook position itself in a fragmented market like Southeast Asia? It’s easier to learn from the lessons why Friendster did not succeed and select localization of the Facebook platform within the region. Here are some strategies that Facebook can think about:

• Focus on Sales on Online Advertising: Like Google, Yahoo! and Microsoft who have established a presence in Southeast Asia market, the most common strategy to adopt by these companies are sales and marketing. It also explains why most operations in these markets are lean and mean and do not take into account of localization and harnessing the greater market potential of these markets. Most brand marketers and media buyers are looking into methods and means to use Facebook to promote products and services, particularly the usage of Facebook pages and ads. While most of these media campaigns are deployed by PR agencies and social media marketing consultants, Facebook can work directly with them but focus on localization of the platform to the market.
• Working with the Developer Communities and Expand the Facebook Credits platform: Social gaming and utilities have been the chief focus on how developers can make money from the Facebook platform. A rising tide lifts all boats and generate more usage within the platform. Currently, most users tend to use Facebook for organizing events, spreading information and galvanizing masses using causes and groups and also pushing Facebook ads. Can more be done? Perhaps, Facebook might be able to supercede the East Asian social networks in Southeast Asia market by pushing the credits platform to get local developers in these regions including India and with more apps, it increase Facebook’s market share and ability to monetize using the micro-transactions model.
• Utilizing strong mobile penetration with partnerships with local national players in Southeast Asia countries: Mobile social networking is getting popular within the Southeast Asia market, but limits the ability of users to make proper transactions via their mobile phones. Facebook is practically installed into every Nokia, Blackberry and Apple device and the trends are showing that most users are accessing the social network via mobile, but it only limits to very general functions. For example, in Korea, the CyWorld app taps into the fact that the mobile phone is also the user’s electronic wallet and pushes online sales of music and wallpaper for the MiniHompy. The most difficult part to get this strategy work is to engage the local telco operators, like SingTel (Singapore), CelCom (Malaysia) and AIS (Thailand).

Conclusion

Should Facebook come to Southeast Asia? At the end of the day, it depends on whether they have a scalable monetisation model that ultimately deliver the promise from the US$716M investment from various sources. Google took quite some time to move to this market and yet focus on only sales and marketing than engaging the developer communities until recently. In fact, Microsoft has been the most active in all fronts and engaged very well with the community, given that they hosted the 2nd Facebook Developer Garage for the community. Friendster squandered the opportunity with one, the wrong hire of a CEO who lives in Australia and not focus the business in Southeast Asia; and two, slow in engaging the communities (even with their partnership with the local government authorities in Singapore). Before they ever decide to come here, they should probably work why the rest have failed and then built on that to create a real success of an online Western social networking platform in the Asian market.

Updates
[21 Sep 2009] Nicholas Aaron Khoo aka Geekonomics wrote a response entitled Should Facebook setup office in South East Asia in his CNET blog on my post. In his post, he used a different measure using Google Trends to look at how Facebook has superceded Friendster. He also gave two candidates for Facebook’s SEA HQ.
[21 Sep 2009] I did an interview with Michael Netzley in the “For Immediate Release” (Hobson and Holtz Report) podcast episode 485 – Sep 21, and talked about some of the emerging trends on social networks in Asia.

Related Links
[1] All Facebook, Facebook Announces 300 Million Milestone And Cash Flow Positive
[2] TechCrunch, Chinese Social Networks ‘Virtually’ Out-Earn Facebook And MySpace: A Market Analysis.
[3] Grey Review, Snapshot of Social Networking in Malaysia.
[4] My recent lecture in Nanyang Technological University, MSc in Technopreneurship & Innovation programme on “Building Online Communities: Trends & Strategies” (in Chinese). I did a case study discussion with the students on a hypothetical scenario with them being consultants to advise on how Facebook can survive in a market like China, and the two most important factors that Facebook has to consider is to work with the authorities and abide by the tight internet regulation and strong localization to the Chinese market drawing ideas from 51.com, RenRen and Kaixin001.
[5] Thomas Crampton, Ogilvy, comScore: Facebook now rules Asia. The ComScore statistics are presented here:

Related posts:

1. Facebook has almost conquered Southeast Asia and why
2. Three Tales about Social Networks @ SMU
3. Top 3 Social Networks in China after QQ

Some time back, the Prime Minister of Singapore announced a few sweeping changes to the election system to encourage more dissenting voices within the Parliament in Singapore. He proposed the following changes namely:

(1) Permanency and Number of Nominated Members of Parliament in the Singapore Political System: Nominated Members of Parliament will feature as a permanent fixture in the parliament. The number of NMPs are fixed at 9. In addition, the Constitution and the Elections Act will be changed to allow a maximum of 9 Non-Constituency Members of Parliament (NCMPs). The number of NCMPs in each parliament is equal to the difference between nine and the number of opposition MPs elected. One important thing to note is that no more than two NCMPs may come from the same GRC ward.

(2) 12 single member constituencies (SMCs) and lesser six-member GRCs: We will have 12 SMCs and we are not sure how these new ones are going to be formed. It is likely that 3 new SMCs will be carved out of the present electoral boundaries. The other change is that there will be fewer six-member GRCs.

It is not in the interest of this article to offer an opinion on the policy whether cynical or positive, but instead, it may be interesting to apply some behavioral economic reasoning involved in how the establishment is applying the problem of relative choice for the Singaporean voters. Based on David Ariely’s model about relative choice in his book, “Predictably Irrational”, here is a situation which one can relate to. Suppose if I have two choices (A) and (B) where it is difficult to compare given different attributes, the introduction of a decoy choice (-A) will provide an individual with a choice that is comparably be better than (B) and tips the individual towards (A).

We will aggregate these new changes in the Elections Act and Constitution and call it choice (A), which is the outcome that the establishment is willing to compromise, i.e. if all the conditions apply, the new Parliament after the next election will have a maximum of 20% representation from the opposition. Given all the recent debacles made by the Singapore government, for e.g., the escape of Mas Selamat and the loss of investments from Temasek, it is difficult for the establishment to determine the anger that is brewing within the voters in the electorate. So, one possible outcome is a freak election where the voters will end up bringing the opposition to power or the loss of many PAP MPs leading to a possible 70% PAP – 30% opposition scenario. Let me call that option (-A). Of course, it looks increasingly difficult to maintain the option that they will stay in power with a 82 PAP to 2 Opposition scenario. So, we call that option (B) which is likely to be ditched by the voters given increasing unhappiness with the government’s policies. To ensure no freak election, the best way is to offer choice (-A) and (B) such that the most optimal choice is (A). Basically, the 20% representation is an option which the PAP has worked out to be a viable option to tempt the voters in making the choice (A).

References:
[1] Dan Ariely, “Predictably Irrational”

Related posts:

1. Singapore General Election 2009 Likely?
2. A Reprise to “Bloggers and Politics”
3. What did they leave out?

The news is finally out: Google is to launch an operating system named as the Chrome OS (bearing the same name with the browser. As stated from the official Google blog: “The Google Chrome OS is an open source, lightweight operating system that will initially be targeted at netbooks…. will open-source its code, and netbooks running Google Chrome OS will be available for consumers in the second half of 2010.” Note also that the OS will run on both X86 and ARM chips and the operating system is running on top of a Linux kernel. Here are the three reasons why Google has decided to launch an operating system in the midst of a crowded space of competitors of not just Windows but Mac OS X and Linux as well (from a business perspective):

• Adoption of the Cloud from consumers is taking a bit longer than expected: First of all, in the past few years ago, when Google launched various apps (e.g. GMail, Docs, Calendar, Spreadsheet) together with Android, it was clear that the strategy is that people will access data and applications from the Internet through a browser and gradually, people will shift from desktop to the mobile phone (which is called the 4th screen by Nokia which gives the power of portability and access to content from the Internet). The mobile phone was the device which Google bet on that it will sidestep Microsoft (given Windows CE does not go well with phones except HTC devices). Despite the rumors of a Google OS were circulating around, Google has proved resilient to make that announcement time and time again until now. What is different in today’s world that Google would have revisited their strategy a few years ago? One clear argument is that the adoption of the Google Office Applications (Documents, Spreadsheets and Presentations) is slow. The reason why it is slow goes in two perspectives: (i) if I am a consumer who writes a document, I am worried about security even though if there is a collaborative perspective towards it, (ii) in the enterprise perspective, most companies will be resistant to have their data sitting on another server and naturally, it will slow down adoption since ultimately, Google will need the enterprise market and the consumer market to move towards the cloud. People are moving towards the Cloud, but the rate of that is not fast enough. So, they need an operating system.
• Android is facing stiff competition from Symbian, iPhone OS and many other competitors: The problem is just not with the users’ adoption with the cloud. In the mobile phone OS space, Android is facing serious competition from iPhone OS (Apple), Symbian (Nokia Smartphones) and Web OS (Palm Pre). The contest in the mobile-web space between several mobile operating systems is heating up. Most developers are in the iPhone OS and Symbian space, and with Nokia pushing their applications via the Ovi Store and their inherent competitive advantage with their handsets, Google Android is at the mercy of the handsets from several vendors. Although the number of android apps are growing, the pace of development is still far slower as compared to the iTunes Apps Store.
• Take one step down and we have the OS and focus on Netbooks: Given the adoption of cloud is slow and the competition faced by Android, Google need to re-align her strategy. Here are the options they can choose: (i) they create their hardware and forget about the mobile phone vendors and computers, for e.g. they can go the Apple way with phones and operating system, (ii) they continue to do hard sell of Google Apps to the enterprise and consumer sector but it takes time for market adoption, or the last option, (iii) Google’s strength is in software, why not create an OS and compete for the desktop and laptop space where Microsoft is still dominant in the PC market. In effect, Google Chrome OS strategy will not pose a major threat to Mac OS X and Linux. By targeting specifically to the netbooks space, they are going for emerging markets and given their brand and innovative software development, they can give Microsoft a hard time in the PC space.

Under all these circumstances, it is not surprising that Google is taking the step to challenge Microsoft in the space of netbooks. In fact, they can team up with the OLPC project and make it really hard for Windows to penetrate into the emerging economies.

Related Links:

[1] Google Operating System: Google Chrome Operating System.
[2] TechCrunch: Google Drops A Nuclear Bomb On Microsoft. And It’s Made of Chrome.
[3] The Next Web: Prediction: Google and Apple go to War.
[4] The Economist: Google vs Microsoft – Clash of the Titans.
[5] Ars Technica: Google’s Chrome OS: what it means, why it matters.
[6] ZDNet: No thanks Google, we’ve got Ubuntu.
[7] Neowin: Microsoft set to respond to Google OS Next Monday?

Related posts:

1. Google Chrome OS: Initial Impressions
2. The Chronicles of a Mobile-Web Economy
3. Some Thoughts on Google vs China

I have recently contributed an article entitled “3 Lessons on Innovation & Experimental Marketing” to iMediaConnection Asia on digital marketing. The article is based on the panel discussion I have moderated during the Ad-Tech Singapore 2009. The question which the article I hope to answer is the following one: How do media buyers, agencies and platform owners engage in creating new and effective campaigns in the challenging financial climate? With the evolution of social media practices and digital marketing, there is a considerable amount of inertia from media buyers, PR agencies and brand marketers to adopt new technologies for experimental marketing in Asia. I broke the three lessons into the following:  (1) The emergence and adoption of new digital marketing technologies and social practices for media buyers, brand marketers and PR agencies that come in the form of rich media content sharing, online social networks and virtual worlds, (2) The nature of advertising has changed for both corporations, publishers and consumers and finally, (3) As a consequence, a change in mindset and expectations is required. I have included some case studies in the article and will urge you to check it out there.

Related posts:

1. Three Tales about Social Networks @ SMU
2. Facebook has almost conquered Southeast Asia and why
3. Why and How Facebook should come to Southeast Asia

Two months back, I broke the story regarding Facebook overtaking Friendster in Malaysia and predicted that the surrounding countries in the region will also fall after. After looking at an updated world map of leading social networks in the globe (by Vincenzo Cosenza – translator of Facebook Marketing Bible in Italian), the domino effect is continuing across the whole of Southeast Asia. Facebook has now overtaken Friendster in Southeast except Thailand and Phillipines. Note that Hi5 is still the most dominant social network in Thailand, and Phillipines remains to be the last bastion for Friendster with their recent introduction of calling cards and mobile payments. How did that really happen given that Friendster received a fresh injection of funds from IDG Ventures SEA?

• Design Interface of Facebook continues to bring new users to her platform: One of the key revolutions in online social networks in the 2.0 era, is the ability of users to be clairvoyant and view the activity of their friends. An example that I often used during my talks on online social networks from Barcamp to Unconference 2009, is that I can now know a lot about a friend who I have not been in touch for the longest time via the activity feed which was first introduced by Facebook. For example, if my friend has uploaded new baby pictures, I would know that his wife has just given birth. It is that kind of interaction that attracted Facebook users. Whereas in Friendster (see the activity feed picture I attached on the right), when I login, the first page that I am directed to is not the page which displayed the activity of my friends but my own user profile. To be fair, Friendster has recently incorporated a “Home” page. In fact, I believe that they have taken a leaf from the dashboard (or Home) page from Hi5.com with the way they display activity of other users connected to you. It is not that Friendster is losing the battle by not trying to catch up with Facebook in terms of functionalities, but rather the way how the users interact via a clean and well-designed interface in Facebook makes Friendster less appealing and starts losing users. In fact, I can easily point out two features which Friendster has imitated from Facebook but failed to gain traction within: groups and apps. Till date, BattleStations (one of the successful Singapore games on Facebook by Tyler Projects) has not done well after their app is launched on Friendster is one clear example.
• Migration of Friendster users over to Facebook: The tipping point for Facebook happens in Sep-Oct 2006, where there is a lot of coverage from the mainstream media in Southeast Asia about the platform. In fact, when I was working with my students in National University of Singapore, most of them are organizing events using the Facebook event feature. Even when I first signed on Facebook, I did not really use the account until I started getting a lot of friend requests via Facebook from my alma mater in UK. In fact, I can now safely say that the crossover of users from Friendster to Facebook and vice versa is asymmetrical with more flow going towards Facebook rather than Friendster. The interesting question now is why Facebook has not been able to supercede Hi5 in Thailand. We should probably explore this further.
• Why social networks in East Asia are not subjected to this Domino Effect: The social networks in the East Asia bloc are making more headways against Facebook as compared to those in Southeast Asia (and they are few and far between local social networks). First of all, one should probably notice that the western social networks are dominant in Southeast Asia and India. India is former British colony and also have a huge English speaking populace, and hence a western social network like Orkut (owned by Google) dominating should not be much of a surprise.The key is that most of the countries in this region are former western colonies and the local populace tend to follow the western social networks with little need for localization. A more subtle reason, I suspect is to do with the business model. In the East Asia bloc, the main revenue model is not just online advertising per se. In fact, most media buyers are still thinking that the only thing they can do in online advertising is just banner ads. They are more conservative in adopting new and radical approaches and given the limitation of micropayments, the situation gets much worse. So, the western social networks may dominate Southeast Asia, but the monetization does not come along while the East Asian social networks are fully monetized from dollar to dollar and cents to cents.

So, the story continues. Speaking of which, if Friendster will to fall in the future and Facebook will to set up shop in Asia, will they be still hiring the same group of executives who did not successfully revive the company against the onslaught from Facebook?

P/S: I have just received a note that the Social Networking World Forum for Asia will be held in Grand Hyatt Hotel, Singapore on 22-23 Sep 2009. I will suggest that a forum like this will be helpful in knowledge transfer from East Asia to Southeast Asia to explain why the social networks in the East Asia bloc are monetizing better than their western counterparts. Perhaps, brand marketers and media buyers should start to move beyond banner ad online advertising for a change.

Related posts:

1. Why and How Facebook should come to Southeast Asia
2. Much Ado About Social Networks in Asia @ Unconference 2009
3. Top 3 Social Networks in China after QQ

The online machinery behind Barack Obama’s Presidential Campaign was a successful case study in the integration of internet technologies with political campaigns, particularly in the role of fundraising, organizing supporters and vote canvassing. Scott Goodstein, the External Online Director in Barack Obama’s Presidential Campaign, is currently in Singapore and has deliver a keynote address in the Ad-Tech Singapore 2009 conference. Together with a group of social media practitioners from all walks of life, the organizers of the event arranged a special interview with Scott this afternoon. We have a discussion about the lessons learnt in deploying the internet technologies to the Obama Campaign and here is a summary on the points of discussion that ensued:

• Strategic Focus & Aim for the Online Team in Obama’s Campaign: Scott started with the Obama Campaign in Feb 2007, where his challenge is to put together a team to deploy online media that can assist the other departments within the campaign, for example, fundraising and field-operations such as election monitoring and vote canvassing. In his own words, the online team is a service team for the finance and field operations teams and to deliver a successful campaign, it is a job that cannot have huge egos and requires the team to work long hours to monitor the activity online.
• Getting the first 1K followers is difficult and you need to experiment and test what works and what does not: Like all start-ups, when the Obama campaign first started, it did not have the endorsements of many trade unions and women’s organizations because of the challenge coming from the Clintons in the primaries. Scott, with his former experience in the music industry, has to experiment and test different channels to start growing supporters for the campaign. MySpace provided the major inspiration for the Obama campaign. The campaign also tried and make a mobile strategy work in the general election. That approach helps them to get supporters & followers to spread the message, get the voters to vote, buying merchandize to raise funds & using keyword search for the monitoring of voters and queues for the Election day. The interesting thing is that the McCain campaign did not even have a mobile strategy to even send SMS to their supporters.
• No metrics or ROI but set goals for the Online Team: In our chat with Scott, his view is that it is very difficult to set metrics or ROI to see how effective online media strategy has worked. However, he did set certain goals for a few challenges during the campaign, for example, (i) how to get people to watch the Obama videos on Youtube which did not happen until the post primary election, (ii) digging news such that it hit the front page and engaging the top influencers (bloggers) to spread the message of hope.
• Engaging people in Conversations and the key reason for success: Despite the successes brought about by online media to the presidential campaign, Scott feel that the key reason that made it work was the messenger Barack Obama and his message of hope that made the difference. He made a remark that if the situation was reversed and applied it to the Hillary Clinton campaign, it will not have worked because the message failed with the American voters. One interesting lesson that I thought it will be useful for Singaporean politicians is that Scott pointed out in engaging people for conversations: You should not talk to or talk at the people, but rather talking with the people, and answer respectfully to their feedback and comments. The execution to get the team to engage with the people in all social networks was not easy. According to Scott, they have to trained all the volunteers, and make sure that the reply to a particular policy question must be consistent when replying to the people in all social networks. If they encounter difficulty in answering those questions, they have to revert to the policy team for advice and come back to comment on the social network with answers.

On the whole, I thought that some of the best practices that I learned from the session with Scott and also his presentation can be effectively mapped over to businesses who are planning to engage their customers. Of course, it will be of interest to whether another political campaign outside US can successfully deliver what the Obama campaign did.

Acknowledgments: I thank Anubha Pandey from Upstream and the Ad-Tech organizers for putting together the session with Scott Goodstein.

Photo of the day with Scott Goodstein:

Related posts:

1. Singapore General Election 2009 Likely?
2. The Audacity to Win by David Plouffe
3. The Problem of Relative Choice for Singaporean Voters

After the talk in Unconference 2009, I have received some queries about social networking sites in China. Based on what I have known, Xiaonei is not the number 1 SNS in China, but 51.com. Other than these two top social networks, there are other social networks which are also dominant within the Great Wall. As Gang Lu mentioned during the panel that the Chinese internet landscape has now moved from cloning era to an reformation era, where the sites are innovating within after realizing that some of the cloned services did not work in the China market. Hence I thought it might be good to summarize the top 3 social networks in China at the present time after QQ which I considered as more of an IM (even though it incorporated social networking features), with the data I have found. Based on an earlier article “Chinese Social Networks ‘Virtually’ Out-Earn Facebook And MySpace: A Market Analysis” by George Godula, David Li & Richard Yu in TechCrunch about an analysis on how Chinese social networking sites are beating their western counterparts, here are the top 3 social networks in China:

Number 1: 51.com with 130M users in China, targets working class adults from rural parts of China after QQ (which I don’t consider it to be a social network, but rather an instant messaging service with certain social networking features within). The site is founded by IT entrepreneur Mr. Pang Sheng Dong, in Shanghai. From the corporate site, it is claimed that the site attracts 14 million unique users visit per week, 31.5 million logins at least once a month, 
350 million page views per day and users uploading over 10M photos and write
over 3M blogs per day. 51.com is jointly funded by Sequoia Capital China (its silicon valley counterpart funded YouTube, Google and Apple), SIG Asia Investments (SAI), Giant Interactive, Intel Capital, Redpoint
Ventures and other renowned international enterprises and venture
funds.
51.com is the first social network in the world which open their payment API (as compared to Facebook who is now starting to contemplate to do so). The revenue is split 50/50 between 51.com and the developer.

Number 2: Xiaonei with 40M users in China and the bulk of the users are students especially from the Chinese universities. The site is created by Wang Xin in Beijing. Often known to be the “Facebook clone in China”, Xiaonei has practically cloned the same user interface from the outside and also opened her APIs to 3rd party developers.  The only known statistic I can find about this network so far that in 2008, there are about 40K unique visitors by April 2009 (source: Crunchbase). The site has been acquired in October 24, 2006 by Oak Pacific Interactive, a holding company which consists of web 2.0 communities, content creation and distribution, and integrated communication. The company is backed up with US$430 million in funding from its parent company Oak Pacific Interactive and investors led by Softbank.

Number 3: Kaixin with 30M users that comprises of white collar workers in China’s largest cities. It came in with a surprise surge of users during July to Oct 2008 and . This social networking site allows for photo uploading, a blogging and micro-blogging platform, music sharing, and a 1G online hard drive, but also adopts controversial invitation techniques in getting members to join the network. Based on Crunchbase data, it has about 20K unique visitors by April 2009. The site has raised a total of US$25M with the series B phase (US$20M) funded by QiMing Venture Partners, Ceyuan Ventures and Northern Light Venture Capital.

Of course other sites of interest in this space are MySpace China (6M Users), Yahoo’s Guan Xi and Tencent’s Xiaoyou. Most of the western counterparts have difficulty penetrating into China because the strategy and approach to market are rather different. The same kind of resistance is also encountered in Korea and Japan by their own dominant social networks, whereas in southeast Asia and India, the situation is reverse with one of the contributing reasons is that most of the countries in that region are either former British colonies or mainly English speaking (with the exception of Thailand and Vietnam). It will be interesting for those social networks in southeast Asia to learn some lessons of user growth and monetization from their east Asia counterparts.

Related Links:
[1] George Godula, David Li & Richard Yu, “Chinese Social Networks ‘Virtually’ Out-Earn Facebook And MySpace: A Market Analysis“, TechCrunch
[2] MJK, TechNama, Top 10 Best Social Networking Sites in China

Related posts:

1. Building Online Communities & Social Networks: Strategies, Tools and Trends in Chinese
2. Three Tales about Social Networks @ SMU
3. Much Ado About Social Networks in Asia @ Unconference 2009

In this year’s For the coming UnConference 2009 organized by E27 team in the Biopolis, I will be doing a breakout session entitled “Much Ado about Social Networks in Asia” about online social networks in Asia. I will discuss the trends and observations emerging that I have seen from my experience in building an online private social network (SENATUS), investing in social networks (iHipo, Eteract) under Thymos Capital LLP and observing dominant home-grown social networks in Asia (CyWorld – Korea, Mixi – Japan and Xiaonei – China). This talk will assemble some of the material that I am currently for a sample chapter for a book that I am working on with two other authors. As a primer, I decide to present the slides on a talk which I have recently given in Barcamp KL 2009 entitled “The Importance of Being Social” (which was featured on Slideshare as the Presentation of the Day) where I presented a framework to understand social networks and a whacky idea to how a next generation Linkedin (based on a weighted social network idea) might look like. In this earlier talk, I discuss (i) the context of online social networks – why some have succeeded and some have failed and used CyWorld as an example of one which succeeded in Korea and failed in Germany and US, (ii) the technology of online social networks – why different features make an online social network platform different in its earlier days since SixDegrees.com (the first online social network), and (iii) the business behind online social networks – why some Asian based social networks particularly in East Asia are trouncing their American counterparts. If you think that I am going to replicate this talk for Unconference 2009, let me tell you that the talk I will be giving will be slightly different in what I have presented.

Related posts:

1. Building Online Communities & Social Networks: Strategies, Tools and Trends in Chinese
2. Much Ado About Social Networks in Asia @ Unconference 2009
3. Three Tales about Social Networks @ SMU