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Facebook Tries to Fend Off Attack of the Clones

July 29, 2008

In its bid to go global, Facebook is facing off against itself.

Clones of the wunderkind social-networking Web site – some of which resemble Facebook right down to color, font and layout – have popped up in local languages around the world. These competitor sites offer identical core services, letting users post pictures, make groups and choose their friends.

All are complicating Facebook Inc.’s global campaign, which began in February and has since rolled out 18 foreign-language editions, including Norwegian and Czech, with plans for 54 more.

Facebook’s international challenges illustrate just some of the ways global expansion can bedevil major U.S. Web companies as they seek swarms of users and advertising dollars in new markets.

Facebook’s particular problem is winning over people who are already hooked on local-language sites hocking similar services with a similar look.

In Russia, for example, where Facebook launched last month, the entrenched social-networking engine online is Vkontakte, a Russian- language Facebook clone that has more than 14 million users.

Facebook officials predict they will triumph, partly because they can spend more resources on improving their site than upstarts can. Facebook also has a strong network of outside programmers who write Web applications for the site, and the company said last week it would extend its translation tools to those developers, to make Facebook even more compelling for overseas markets.

Plus, its users can connect with friends from other countries, something local sites can’t offer.

“They can gain traction in individual countries but they are not going to be able to compete on a global scale,” Facebook spokeswoman Jaime Schopflin said.

But social-networking sites mirror real life, and many Russians dread moving to a neighborhood where they have no friends.

“All of my Russian friends are on Vkontakte,” said Moscow resident Galina Ryazanova, 21, a recent college graduate who uses both Web sites. “I don’t think they’ll switch to Facebook because everyone is already established on Vkontakte.”

Ryazanova visits Facebook about once a month to keep up with her non-Russian friends, she said, but uses Vkontakte three or four times a week. She criticized Facebook for allowing too many distracting applications, and for allowing users to translate part of the site – producing what she said was poor-quality Russian.

Facebook dominates the social-networking market in many English- language countries and is growing quickly elsewhere. It is the most popular social-networking site in Britain and one of the top three in France, tracking company comScore reported.

But in countries such as Germany and Russia, where competitor sites have taken root, Facebook seems to be gaining ground more slowly. According to comScore, Germany’s StudiVZ and Russia’s Vkontakte are widely outdrawing Facebook.

Facebook software engineer Alex Moskalyuk said his company has no direct strategy to attract users from competitor sites.

“You can spend your time worrying about the competitors or you can spend your time innovating your product,” he said. “We chose to do the latter and not the former.”

That strategy apparently changed this month, when Facebook filed an intellectual-property lawsuit against German clone StudiVZ in a federal court in California.

Though Facebook claims StudiVZ unfairly copied its content, StudiVZ says Facebook is trying to stifle the competition as it pursues the global market. The faceoff has fueled speculation that a string of lawsuits against clone sites could begin.

The stakes are high. Microsoft snared 1.6 percent of Facebook for $240 million in 2007, valuing Facebook at roughly $15 billion. Investors poured $430 million this year into the parent company behind China’s Facebook-like Xiaonei. Der Spiegel reported that a publishing company bought StudiVZ for $132 million in 2007.

In Russia, Vkontakte dominates the market along with one other site, which is geared more toward adults.

“Vkontakte has already become like a habit,” Nikita Glushik, 19, said as he checked the site at a Moscow Internet cafe. He said he had never heard of Facebook.

With the sites looking so similar, Russia’s renewed sense of national pride might be enough to give Vkontakte an edge.

“Facebook is American and Vkontakte is Russian – that’s the main difference,” Ryazanova said. “It’s going to be tough for Facebook to displace Vkontakte.”

challenge

Facebook is facing competition from knock-off services overseas, such as the Russian service Vkontakte, that have already attracted a large following.




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