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For Internet Companies, Profits Are Inversely Proportional to International Eyeballs

Internet companies are slowly beginning to realize that more eyeballs don't necessarily translate into more advertising dollars and what really matters is the location of these eyeballs.

Facebook has more than 200 million members worldwide who spend around 3.5 billion minutes on the site each day. Visitors to YouTube watch around 5.8 billion video clips each month and more than 50% of the YouTube audience is based outside the United States.

While these numbers definitely sound very impressive, Internet companies are slowly beginning to realize that more eyeballs don’t necessarily translate into more advertising dollars and what really matters is the location of these eyeballs.

World Map of Internet Ad Dollars

An NYT report says that the number of Internet users in developing countries (like India) is rising rapidly but web companies are still pulling out due to the high bandwidth costs and low advertising rates.

The CEO of Veoh has this to say about users in Africa, Asia, Latin America and Eastern Europe:

..these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it?s very difficult to derive revenue from it.

And he’s isn’t alone in saying the people in developing countries aren’t really interested in online advertising. The chief of Joost too suggests that video companies should pull out of Asia, Latin America and the Middle East if “they really want to make money”.

For Internet Companies, Profits Are Inversely Proportional to International Eyeballs - Published at Digital Inspiration (RSS)


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