Facebook doesn’t break down its revenue according to the wealth of the countries in which it does business, but a funny thing happens when you do: It becomes apparent that Facebook’s push into emerging markets is paying dividends much more quickly than anyone realized.
That’s according to some back-of-the-envelope calculations by Nathan Eagle, CEO of Jana, a company that allows brands to reach people in the developing world through paid surveys on their phones. In a session he and I just concluded at Quartz’s Next Billion event (live stream), he mentioned that he had looked at Facebook’s current revenue by region and simply extrapolated into the future, at current growth rates, Facebook’s revenue in both emerging markets and rich countries.
The results vary according to your assumptions. If you assume, for example, that the rate of revenue growth in North America and similar regions slows, the considerable pace of revenue growth in emerging markets means they’re producing half of Facebook’s revenue within 18 months to two years. If on the other hand Facebook continues to grow its revenue in rich countries at its current pace, which is faster than analysts expected, it could take up to five years. Facebook has been dropping hints for a while that it expects emerging markets to be key to its future growth.
Whether it’s two years or five years hardly matters—in either case, Facebook is about to become the vanguard of a new generation of internet companies which, despite their pedigree in Silicon Valley, will rely on emerging markets for most of their revenue—if not profits.