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Facebook popularity rises with cheaper Internet

Cheaper Internet-ready phones may make India Facebook's biggest market after the United States next year with more than 50 million users, according to Nielsen Co.

business Updated: Aug 12, 2011 12:25 IST
Ketaki Gokhale

In a two-room shanty with no running water in northern Mumbai, Darshana Verma makes tea on a small stove. On a bench nearby, her 18-year-old son, Vishal, messages Facebook friends on the keypad of his Nokia smartphone.



"This is the Internet age," said the 36-year-old domestic helper, who spent more than half her $300 monthly income on Samsung Electronics and Nokia mobile phones for her children. "Facebook is there, all these things happen there now -- they make friends, maybe they can even find jobs there."



Cheaper Internet-ready phones may make India Facebook's biggest market after the United States next year with more than 50 million users, according to Nielsen Co. As Google's rival social network also gains in popularity, companies including Pepsi are boosting Internet advertising to reach the 352 million children under age 15 who are coming online.



"There's a mob out there," said Tarun Abhichandani, group business director at IMRB International, part of WPP Group, the world's biggest ad agency. "India has a young demographic, and it's social networking that brings them online."



The number of active accounts in India jumped 85 percent to 32 million this year, according to socialbakers.com, which tracks user data at the Palo Alto, Calif.-based company. That's the world's third-biggest behind the 153 million in the U.S. and 39.2 million in Indonesia.



Mobile handset sales in the world's second-fastest growing major economy will surpass 206 million units annually in 2014 from 175.9 million last year, Gartner Inc. forecasts.



Pepsi and MTV have been quick to tap the popularity of Facebook in the South Asian nation through promotions and contests. Their Indian pages have garnered 1.4 million and 2.9 million "likes," respectively.



"Indians want brands to communicate with them using social media," said a Nielsen report, adding that 60 percent of Indian social-media users are "open" to being approached by brands.



Online advertising in India rose 26 percent to $223 million in the year ended March, according to IMRB. Advertising on social networking sites grew as much as 65 percent from the year before.



"The shift to online advertising is just starting to happen," Abhichandani said. "The number of Internet users here is on the rise and is going to keep rising for some time. Advertisers are realizing that."



Facebook opened an office in Hyderabad in southern India in September to serve users, advertisers and developers in the country and around the world, spokeswoman Kumiko Hidaka wrote in an email. The company is trying to improve service by working with mobile partners and "building relationships with India's strong network of developers and entrepreneurs," she said.



Facebook is blocked in China, the world's most-populous nation. The social-networking company has held talks with potential partners about how to gain a foothold in the country, a person familiar with the matter told Bloomberg News in April.



China, the world's largest Internet market with more than 450 million Web users, bans pornography, gambling and content critical of the ruling Communist Party.



"Facebook has chosen to focus on open markets, rather than markets like China where there's censorship and control," said Foong King Yew, vice president of research at Gartner in Singapore. "India's the biggest of those. It's rapidly growing. It's an untapped market."



A mobile phone allows 22-year-old student Rachel Thomas to log on when she's at school.



"Facebook is the first thing I do each day," said Thomas, who is studying for a master's degree at the Delhi School of Social Work and counts about 1,000 friends on the social- networking site. "I don't know anybody who's not on Facebook. My mom's on Facebook. My whole class is on Facebook."



Twitter is also gaining in India, helped by iconic users like Bollywood star Shah Rukh Khan, business tycoon Anand Mahindra and former minister Shashi Tharoor. Tata Consultancy Services, India's largest software exporter, posts its earnings in 140-character messages on the micro-blogging website.



Research In Motion Ltd. said its growth in emerging markets such as India and Indonesia has largely been driven by social networking applications like Facebook for BlackBerry 2.0. Rival Huawei Technologies Co. sells phones with a "Facebook button."



A big draw for many Indians is the falling cost. Phones with Internet browsing capability sell for as little as $23.



For Verma, who never learned to use a computer and saved for 10 months to buy her elder daughter's phone, that gives her children an opportunity she didn't have.



"What I don't know about -- Facebook, Internet -- they need to know about," she said. "It is worth the expense."

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