AOL splashes images of Bollywood celebrities on its new home page for India. MySpace accepts sign-ups from mobile phones in Japan. Google departs from its...
NEW YORK — AOL splashes images of Bollywood celebrities on its new home page for India. MySpace accepts sign-ups from mobile phones in Japan. Google departs from its Spartan home page and peppers its South Korean site with colorful, animated icons.
As major U.S. Internet companies stake their ground abroad, anticipating the next billion people coming online and the ad revenue they might generate, the flags they plant aren’t the Stars and Stripes.
Companies are trying to expand globally without seeming to, designing market-specific services that reflect differences in connection speeds, payment options and attitudes toward sex or violence.
The stakes are high as the United States faces a weakening economy and a slowing of online-ad growth.
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The opportunities are large. People in India and China are just getting online. Research firm IDC projects worldwide Internet ad spending at nearly $107 billion in 2011, compared with $65 billion this year.
But getting it right will be tough. American companies that merely translate their U.S.-focused sites into other languages risk losing to homegrown businesses that can better respond to cultural nuances.
Sites jazzed up
Google discovered that in South Korea and China, where it initially held its minimalist approach — only to see local rivals thrive by acknowledging their users’ preference for sites rich with entertainment and visual complexity.
“A lot of times, the U.S. companies, because they were successful in the U.S., they tend to repeat their current business models,” said Tian X. Hou, a Pali Research analyst who follows China. “Most of the time, that doesn’t work.”
Cho Ko-un, 29, a graduate student sitting in a Seoul cybercafe, finds Google good for English and academic research, but local portals like Naver and Daum better for Korean-language information.
Naver, for instance, has forums for users to answer one another’s questions, which proved helpful when Koreans couldn’t find a site in their native tongue.
Tom Anderson, co-founder of MySpace, said dominance in one market means nothing as the company expands to nearly 30 other countries and regions. He said local incumbents have a key advantage because “it’s difficult to get people to change their behavior.”
MySpace is nonetheless trying. In South Korea, it offers an exclusive “minilog” for youths to jot down everyday thoughts and feelings.
In mobile-heavy Japan, people can sign up for an account from a phone; elsewhere, you need a desktop computer.
MySpace tweaked its Chinese site to generate new windows with every click, in deference to local user preferences.
The News Corp.-owned company also is exploring low-bandwidth versions — perhaps with fewer graphics or less audio — for India and Latin America, where connection speeds tend to be slower.
AOL, meanwhile, has launched about two dozen international sites during the past 18 months.
As the one-time Internet access powerhouse transforms itself into an advertising business, executives decided to push into several emerging markets they knew wouldn’t pay off for another few years.
“Our goal is to plant the flag, to be present,” said Maneesh Dhir, AOL’s India-based international chief. “Then you work to grow that business.”
In each market, AOL partners with local content providers.
The Indian portal is heavy on Bollywood films, covering their stars as fiercely as American sites follow Lindsay Lohan. Instead of baseball, the portal covers cricket, with schedules, team profiles and an online fantasy game.
Microsoft has more than 80 people worldwide who make sure its products and services do not stereotype, offend local sensibilities or prove irrelevant in a particular culture. Its instant-messaging product, for example, varies icons and emoticons to reflect flowers, animals and characters popular in each market.
Challenge for Google
Google has had a different challenge.
With a dearth of Arabic Web sites, it had to find a way to persuade Arabic speakers that the Web was worth exploring.
So it developed a system for automatically translating an Arabic user’s search terms into English, checking its English index for matches and translating relevant Web sites back into Arabic for Mideast markets.
To take on China and South Korea, where it trails rivals, the normally sparse Google site for those countries now displays icons that jump as users move the mouse.
In China, Google also took the much-criticized step of filtering its results to avoid revealing search results blocked by the government.
But Baidu is still the Chinese search leader, thanks to its willingness to add music video and other entertainment features.
Analyst Greg Sterling of Sterling Market Intelligence said many companies have stepped up international ambitions “to insulate themselves as much as possible” from the weakening U.S. economy.
Seattle’s Amazon.com and eBay were among the pioneers in expanding abroad, gaining dominance by buying local companies that knew the markets already, said Anette Schaefer, a Europe-based director at the Yankee Group.
Pali’s Hou said Microsoft’s MSN also has made inroads in China, thanks to its highly local staff in touch with Chinese affinity for entertainment news.
But expansion hasn’t always been smooth. Though strong elsewhere, eBay failed to gain traction in Japan and pulled out in 2002.
Among its missteps: It insisted on credit cards in a largely cash-based society.
EBay is re-entering Japan by teaming up with auction leader Yahoo Japan, which itself is Yahoo’s joint venture with prominent Japan’s Softbank.