When Friendster first noticed that its social-networking service was gaining a strong following in the Philippines, company executives weren't sure how to capitalize on the unexpected popularity.
In the United States, where Friendster and most of its members reside, the site makes money by selling advertising. In the Philippines, however, Friendster recognized that such a strategy wouldn't fly.
"Online advertising is not enough to sustain a business in the Philippines," said Joe Hurd, Friendster's vice president of international, noting that the percentage of Filipino households with internet access is far lower than in the United States. Instead, Friendster focused on mobile phones, the use of which is much more widespread.
In December, the site rolled out a mobile-phone text-messaging service for Filipino members. While Friendster hasn't disclosed how many people it has signed up, Hurd said he was "quite pleased" with the response.
Friendster, which today has millions of Filipino members, is one of a number of advertising-supported internet sites grappling with the dilemma of how to take advantage of unforeseen overseas popularity. Such sites are finding that business models that work in large, developed countries need serious readjustment in nations with small populations or low internet-penetration rates.
Of course, for U.S.-based websites, attention from overseas is nothing new. Yahoo, Google and other top internet sites have long generated page views from all corners of the globe.
But more recently, among social-networking sites where new users invite friends and business colleagues to sign up, international growth is occurring at an exceptionally rapid rate. Sites that thought they'd grow in the United States before expanding overseas are instead taking off in unexpected places.
"All of a sudden, we reach a critical mass in one country and then it goes crazy," said Konstantin Guericke, director of marketing for LinkedIn, a networking site for professionals. Without any promotional effort by the company, Guericke watched the service take off, first in Iceland, then in Finland, Israel and the Netherlands, among other places.
Google's social-networking site, Orkut.com, meanwhile, has been a surprise hit in Brazil. Today, 66 percent of Orkut users are Brazilian. Rounding out the top three are the United States, where 10 percent of users reside, and Iran, home to 7 percent of Orkut members.
David Moore, chief executive of 24/7 Real Media, an internet advertising firm, says sites shouldn't be surprised that they're getting attention from far-flung locales. International exposure is part of doing business on the web.
"When you put up a website, your audience is the world," Moore said. "You have to pick what segment of the audience you want to reach but realize that everybody's going to have the opportunity to view."
Eventually, Moore expects websites will be able to generate profits from online advertising in most of the world. For now, however, advertising-based business models work in only a handful of countries.
Currently, Moore said his firm finds that websites can profitably sell advertising in nine countries besides the United States: the United Kingdom, Italy, Spain, Germany, France, Australia, Canada, South Korea and Japan.
However, all one has to do is look at a few internet bellwethers to see where things are headed, said John Yunker, president of Byte Level Research, a firm that analyzes web globalization.
Today, Yunker said, more than half of eBay's registered users live outside the United States, and the majority of Google's traffic comes from overseas. He predicts that before the end of 2006, Google and eBay will generate more than half their revenues from outside the United States.
Trends apparent at the biggest sites also apply to small and midsize internet companies. It probably won't help a site's bottom line today to draw pageviews from, say, Iraq, Moore said. But that won't always be the case.
"Down the road, as this whole world gets wired, there's definitely going to be the opportunity to monetize anybody who ever comes to your site," Moore said.
For many site operators, however, overseas growth has occurred so rapidly that they haven't had much time to cobble together a plan of action.
In Friendster's case, Hurd estimates that the networking site now has millions of users in the Philippines. That growth occurred with no promotional efforts on the company's part, however, so no one had a predetermined strategy for how to respond.
Hurd said internal analysis indicates that Friendster first gained traction with the large Filipino community in the San Francisco Bay Area, then spread across the Pacific.
"You have a direct vector from San Francisco to Manila," he said. In addition to the Philippines, Friendster has a large following in Malaysia, Indonesia and Singapore.
Along with its mobile-texting service, Friendster is also experimenting with online classifieds. Last week, it launched Pusit, a site that Filipino Friendster members can use to post or search for jobs, items for sale, real estate listings or events. The site name derives from the Tagalog word for squid, a favorite local dish.
At LinkedIn, Guerike said the site has also been able to incorporate overseas members into its business plan, which involves charging employers to post job listings. Today, Guerike estimates that 30 percent of its job listings are for positions outside the United States.
Google, for its part, didn't disclose how it plans to profit from Orkut's popularity in Brazil, which the company says was the result of "organic" growth rather than any concerted promotional effort.
However, the site has shown some consideration toward its predominantly Brazilian user base. It now posts its help pages in Portuguese and includes an explanation in that language for why members who can't access the site may get a message stating: "Bad server, no donut for you."
