Global Online Fusion: A Brave New World

This year, the worldwide internet population is 934 million. In 2007, the worldwide internet population is projected to reach 1.35 billion. (Both figures are from the Computer Industry Almanac).

With the rapid growth of online users in countries such as China (by the end of this year alone we will have seen the online population in China go from 70 million to 100 million) and Japan (the percentage of households in Japan using broadband is set to grow to over 70 percent by 2007, according to eMarketer), coupled with top U.S. internet companies like Google and Yahoo! expanding their international operations, companies must start viewing globalization as a necessity rather than a sideline.

One only needs to look at the recent activity in the online space to realize that global online fusion is happening right now.

Enter Livedoor, Inc., a leading online media services company and a wholly-owned subsidiary of Japan-based Livedoor Co. Ltd., arguably one of the world's largest media companies with a current market cap of over four billion U.S. dollars.

Livedoor recently acquired ClickDiario Network. In April of this year, comScore Media Metrix ranked ClickDiario Network as the fastest-growing Hispanic network. The company ranks in the top 10 most popular advertising networks focused on the Spanish-language online market. ClickDiario has more than 200 clients including several Fortune 500 companies.

According to Livedoor Executive Vice President Noriaki Okubo, "the acquisition of ClickDiario strengthens our international presence and is a clear example of Livedoor's ability to deploy on our strategy of being a leader in technology and media services worldwide."

ClickDiario's proprietary network consists of more than 30 vertical websites that are visited by over 45 million unique users per month. The company's main websites include portals such as Deportes.com (Sports), Salud.com (Health), Mujer.com (Women), Mascotas.com (Pets), Boletines.com (Newsletters), Dietas.com (Diets), and Tarjetas.com (Greeting Cards).
 
Beth Cann, vice president of marketing for Livedoor, Inc., believes that the acquisition is a highly strategic move, especially to penetrate the burgeoning U.S. Hispanic market.

"If you take the U.S. Hispanics as a whole in buying power it would be the second largest Spanish speaking country in the world -- 700 billion dollars in purchasing power, and it's projected to reach one trillion in another five years! You can't ignore the Hispanic market. The only question is how do you get to them? The online Hispanic market is very young and their average age is substantially lower than the general market. Fifty-six percent of Hispanics online are between the ages of 18 and 34, versus the general market of 34 percent being 18 to 34. Online Hispanics' medium age is 26 years age versus 33 of the general market. They're early adopters in terms of technology. For example, the Hispanic market skipped the dial-up generation and is adopting broadband at a higher rate than the general market. They're new to the market so they're going for the state-of-the-art technology. The growth of internet use by U.S. Hispanics is growing at a much faster rate than that of the U.S. general market."

In accordance with Cann's views on U.S. Hispanics, the Direct Marketing Association recently released the 2005 Hispanic Market Report that highlighted three significant facts for marketers:

  • U.S. Census projections indicate that the Hispanic population will triple to over 102 million by 2050
  • Hispanic-Americans are increasing in affluence and are among the most credit-worthy customers in the United States
  • Hispanic-Americans have a purchasing power currently greater than 600 billion U.S. dollars and expected to grow to one trillion U.S. dollars by 2007

Tom Tauli, a writer for Forbes magazine and author of "The Complete M&A Handbook" argues that, "more and more, advertisers want to target foreign markets. That's the key with Livedoor's latest acquisition. While it has done well in Japan -- sporting a four billion dollar market cap -- it realizes it needs to expand its reach. With the purchase of ClickDiario.com, Livedoor gets more than 30 vertical sites that focus on the Spanish-speaking world, which is certainly a coveted demographic. Dealing with foreign online markets is no easy feat -- so, acquisitions make a lot of sense.  Expect more of these types of deals to come."

Aggressively expanding Spanish language outreach to the U.S. Hispanic market as well as in Latin America and Europe is what will make companies such as Livedoor key players in the online international marketing space.

Online globalization is happening right now. Companies that want to stay ahead of their competitors and increase market share in global markets must take the necessary steps.

In his book "The Lexus and the Olive Tree," Thomas Friedman writes, "John Chambers of Cisco likes to say that the companies and countries who will thrive in this internet economy are those who will grasp its importance first, and get wired before the rest of the world realizes that they have to change. If you do that faster than your competitors, says Chambers, there's only one thing you'll have to say to them: 'Game over'."

Additional resources:

"No Summer Break for Media M&A" by Tolman Geffs of The Jordan, Edmiston Group.

Elizabeth M. Lloyd  is chief marketing officer of DMO Global, a leading affiliate network solely dedicated to serving international and multicultural markets. Lloyd's work on international online marketing has been highlighted in numerous publications as well as in academic curricula for MBA international marketing programs worldwide. DMO Global is a wholly-owned subsidiary of Dragon Media Online, Inc.

 

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