This is the discussion and the comments to the question i posed in the IIMB alumni group at linkedin.com
Why is it that web-portals with multi-country users invariably based in the USA? What could be the barriers for and Indian or say a German website for having globally distributed user group?
I looked up the details of top 200 website on alexa.com. Looking at the country based usage I could see a pattern emerging. I could broadly classify the websites into 3 categories.
1. Free with global users: (google, yahoo, etc)(long tailed distribution of users) almost all websites in this category were based in USA
2:Payment and Global Usage:(eBay, Amazon) (Broad but short tail) Mostly based in USA.
3.Country/Language specific: (Baidu.com, rediff.com, yandex.ru)(Spike distribution) Based in individual countries.
What surprises me that most of the websites in category 1 & 2 are based in USA!!! Surprising because internet is supposed to remove all barriers. A person visiting a website does not need to know where the website is – but still we have this marked concentration of global websites in the USA!
I wonder why! I have a few hypothesis. I would like to know your opinion on the cause.
The answer to this question will i believe be of profound strategic implication.
1. One simple reason is that US Traffic converts more than any other geography. This simply means that a user from the US is more likely to have a monetary transaction online than one from any other geography.
So really, its just a demand and supply issue. Google, Yahoo are free but make most of their revenue from online advertising. So is the case with Facebook (it just kicked off Microsoft as its Advertising Partner because it doesn’t wana share any of its Ad Revenue) or any other portal.
Why is online retail (for example- groceries) in India not that prevalent. The mindset in most of the population is to gather information online, but not to convert it into an actual purchase.
2. How many Indian/ US authors in management, per employee billing of IBM Vs. Infosys?
We do not understand strategy or strategic implications !
Joseph Manuel, http://www.firstdiscipline.gaia.com/blogs
3. It may be true that we do not understand the strategic Implications, the situation being as it is; what do we do now?
If i want to internationalize my website, what constraints do i face? and how do i overcome the hurdle?
4.Go ahead and do it. Winner stakes ALL
Strategise. Look for allies, partners, show them that there is more than what meets the eye in doing it
5. I think its the ecosystem issue. US has a great ecosystem which fosters technological innovation.
Paul Graham has an interesting essay on this: