The Asian online advertising market is probably worth around $3-5bn a year.
That’s according to Richard Kimber, who has just taken over as CEO of social networking site Friendster. Hard numbers are difficult to come by, but as the former regional head of Google’s business in South Asia Kimber probably has as good a handle on this as anyone.
Compare that with the $26-27bn US online advertising market this year and you get a sense of where the real money on the internet will be made for some time to come. There’s a temptation to make loose comparisons of online audience numbers around the world, but not all eyeballs on the global internet are equally valuable. The average US internet user helps to generate around $140 of advertising a year: in Asia, the figure is more like $10-15.
Even then, it would be a real mistake to look at Asia as a single bloc. When I spoke to him, Kimber singled out Australia, Japan, South Korea and Singapore as the most developed advertising markets in the region. The countries where he says Friendster has the strongest foothold: Malaysia, the Philippenes, Indonesia and Singapore.
That puts a different perspective on the sort of audience numbers that are frequently bandied around freely in the internet world. Sure, Friendster’s 75m registered users (up from 45m a year ago) and 37m unique monthly visitors are impressive numbers and, thanks to the network effects, may give it a lasting foothold. But making money from social networks is proving tough even in the developed markets.
Kimber, an Australian who once ran the First Direct online bank in the UK and HSBC’s internet businesses in Hong Kong, says he’s hoping eventually to lead a Friendster IPO, though “in the long term”. In the shape of IDG Ventures, which has just led a $20m financing round (Friendster has raised $45m in all) he also has a new investor on board with a good track record in the region. It looks like they’re digging in for the long haul: good thing.
