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Taking social networks abroad - Why MySpace and Facebook are failing in Japan

Offering a country-specific version before a local copycat beats you to it is an obvious key factor for success, and not only in Japan. But being relatively complex entities, social networks face a trade-off between additional risks and potential gains in the course of localization. Overdoing the adoption to local tastes might compromise the big idea and infrastructure of the site (i.e. in the form of cluttered interfaces or fragmentation into culturally and linguistically walled ?mini-networks?).

Practical experience from the Japanese web industry has shown that partnering up with a local company is the best way to diminish these dangers (see Yahoo Japan, the No. 1 site in the country, which is a joint venture run by Softbank). Japan has embraced just five American web brands which decided to go solo and none of them is a social network: Wikipedia, Google, YouTube, Twitter and Amazon.

MySpace?s establishing of a physical presence in Japan was received as a sign of long-term commitment, a move which melds with the local mentality. But in Japan, maintaining your autonomy comes with a price: It?s no secret that it usually takes foreign companies years to build up brand identity, trust, industry connections and general market knowledge.

The same is true for complex web products such as a social network ? if the company behind it really means it. Currently it seems Facebook and (to a lesser degree) MySpace chose to start working the Japanese market with a minimum of resources. But in most cases, remote management is perceived in insular Japan as second-rate treatment. Apart from M&As, cooperating with an established local partner seems to be the best shortcut option conceivable. It?s almost impossible to win in Japan without close interaction with end users, press, developers, potential employees and advertisers.

But the Japanese market isn?t lost yet for MySpace and Facebook, despite Mixi?s dominance. If millions of Americans don?t mind registering to multiple social networks, why should the Japanese? Growth potential, especially for Facebook, also exists in the realm of connecting professionals online, which may be the reason why LinkedIn is currently pondering a market entry in Japan. In that specific field, they and designated partner Digital Garage (which helped Twitter build traction and earn money in Japan), see practically no competition in this country.

(Editor's Note: Serkan Toto is a TechCrunch contributor based in Japan).


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