This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Digital Skeptic: Facebook Has Many Mouths to Feed in Global Market

With additional reporting by Apurva Chaudhary in Mumbai

NEW YORK ( TheStreet) -- It's never easy getting paid. And in this grinding global mobile economy, it's especially not easy for Facebook (FB - Get Report) to get paid.

This year, the social media giant announced it would offer other countries, including India, the ability to pay to promote a post. Already well-known to American users, pay-to-promote, at least when I tried it, is where Facebookers cough up a couple of bucks -- in my case, $8 -- to get more folks to see one's Facebook stuff.

Life-changing it was not, but at least I paid for something on Facebook. And investors are betting that between these and other paying services some real money will really flow Mark Zuckerberg's way. Overseas markets such as India look particularly lucrative. There are 60 million some-odd Facebookers in India, according to SocialBakers, a Czech Republic-based social media search measurement firm, and these users live in a country with $1.8 trillion in GDP for 2011 that should grow in the 7% range this year, according to the World Bank.

It all seems so rosy, but of course it's the digital age. So it's not. Break down the nitty-gritty of Facebook offering -- and getting payment for -- a service in an emerging economy such as India's and it gets very clear very fast that Mr. Zuckerberg will have a lot of hungry mouths to feed before he ever sees a dime.

It's crowded in here
At first blush, how Facebook does business in India is how it does business here in the U.S. Harish Krishnan, who blogs about social media for BlogAdda, one of India's largest blogger communities, and who uses Facebook heavily to market and communicate from Mumbai, explained via email to me how Facebook's paid service works in his home country.

Users are prompted -- just like they are in the U.S. -- with an offer to promote a post for a fee. To explain, he included a screenshot of what an average Indian Facebook user, in this case Ravi Sethia, faced when trying to pay to promote a post on India's Facebook service back in September.

What happens, Krishnan told me, is that as services such as Facebook try to charge fees, something very un-American happens: All sorts of third parties flock in seeking a cut of the action.

"A lot of mobile carriers have included [Facebook] as a value-added service to incite more users," he said. "But there is a difference in the charges based on the mode of payment."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
FB $87.04 1.50%
AAPL $126.28 0.68%
GOOG $519.38 -0.22%
TSLA $269.84 0.59%
YHOO $39.26 -0.08%

Markets

DOW 17,724.63 +105.12 0.60%
S&P 500 2,075.18 +12.07 0.58%
NASDAQ 5,014.3550 +27.4880 0.55%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs