VoIP In Detail covers everything related to VOIP, software, hardware, service providers, reviews, configurations, standards, tips & tricks and everything else related to voice over IP networks, IP telephony and Internet Telephony. Facebook is booming in Turkey and Indonesia. YouTube’s audience has nearly doubled in India and Brazil.
That may seem like good news. But it is also a major reason these and other Web companies with big global audiences and renowned brands struggle to turn even a tiny profit.
Call it the International Paradox.
Web companies that rely on advertising are enjoying some of their most vibrant growth in developing countries. But those are also the same places where it can be the most expensive to operate, since Web companies often need more servers to make content available to parts of the world with limited bandwidth. And in those countries, online display advertisement is least likely to translate into results.
This intractable contradiction has become a serious drag on the bottom lines of photo-sharing sites, social networks and video distributors like YouTube. It is also threatening the fervent idealism of Internet entrepreneurs, who hoped to unite the world in a single online village but who are increasingly finding that the economics of that vision just do not work.
Last year, Veoh, a video-sharing site operated from San Diego, decided to block access to users in Africa, Asia, Latin American and Eastern Europe, citing the dim prospects of making money and the high cost of delivering video in those places.
“I believe in free, open communications,” said Dmitry Shapiro, the Veoh chief executive. “But these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.”
Internet start-ups that came of age during the Web 2.0 era — roughly from 2004 to the beginning of the recession last year — generally subscribed to a widely accepted blueprint: build massive global audiences with a free service, and let…
See more here:
Net Startups Find Global Expansion a Costly Game
Related posts:
