India key to Facebook growth

Facebook, which is primed for the biggest ever share offering by an internet firm, counts India, along with the United States and Brazil, as its main growth drivers, the company has said in a regulatory filing. Nearly one in two Indian internet users is now on Facebook, which makes India the second-largest user base for the Menlo Park-based social networking firm headed for a $12-billion listing on the Nasdaq. \"Users in India, United States and Brazil represent key sources of our growth,\" Facebook said in its filing to the Securities and Exchange Commission, days before its listing, likely on May 18. Facebook\'s India user base has more than doubled in a year to 51 million at the end of March, Facebook said last week. Comparatively, its American user base grew only 15% to 169 million from last year. At about 45 million users, Brazil comes next. Facebook\'s acknowledgement of India as one of its top three markets comes at a time, when its lawyers are fighting criminal and civil suits in Indian courts over user postings deemed objectionable. Facebook earned about $99 million in advertising revenues from Asia, largely led by India and Southeast Asia during the March quarter. Facebook is banned in China. However, despite the over 100% growth in user base in India, monetisation may take longer. Out of the total ad market of about 26,500 crore, social media advertising spending is only 94 crore, largely led by Facebook, according to the Internet and Mobile Association of India. Indian web entrepreneurs are keenly watching the Facebook IPO as the social network has become a key advertising channel for many of them. Among them is Ashish Kashyap, group CEO of Ibibo, which runs online social gaming site Goibibo.com and Ibibo games. The site spends 20% of its advertising budget on Facebook, double from a year ago. \"Social media ads give us the advantage of context based socially relevant advertising,\" Kashyap said. Access through mobile devices by users in India, Indonesia, and Brazil will power growth for the social networking firm. The valuation of the social networking firm, which is now around $100 billion based on the proposed listing price, has taken everybody by surprise. Over 90% of Facebook\'s $3.7 billion revenue comes from advertising. Average revenue per user in the first quarter of 2012 was $1.21. \"We expect that user growth in the future will continue to be higher in those regions where ARPU is relatively lower, such as Asia,\" Facebook said in its filing.