Who's the Google of social networking sites? The obvious answer may seem to be Facebook, given its rapid growth, successful cooperation with application developers, and ever-smarter ad targeting. But by some measures, the real answer is even more obvious: Google itself.
This week, Google (nasdaq: GOOG - news - people ) is drawing attention to its often-ignored social networking site, Orkut.com, with a redesign intended to prettify the site's Spartan look. And attention is deserved: Despite its low profile in the U.S., Orkut now draws 38.2 billion page views a month worldwide, 7.8 billion more than Facebook, according to comScore Media Metrix.
In Brazil, where Facebook and MySpace are virtually unknown, Orkut has become a smash hit, with 15.6 billion page views monthly, by the count of Nielsen/Net Ratings. That kind of popularity doesn't just dwarf Facebook's Brazilian traffic, which is practically nil; it's also nearly 10 billion more monthly page views than Facebook draws from Americans.
Orkut's success in Brazil seems largely to be a fluke. The site hasn't made any special appeal to Brazilians, and only began to offer a Portuguese-language option in April of 2005, long after it had become the social network of choice in Brazil. One blogger argues that its name, which was taken from Turkish-born Google engineer Orkut Buyukkokten, is catchy in Portuguese and reminds Brazilians of a popular yogurt drink for kids.
But a bigger question than the cause of Orkut's popularity is the site's potential for profit. Facebook will earn more than $100 million this year, according to one of the site's investors, Jim Breyer of Accel Partners. And with the right advertisers, Orkut's Brazilians and other foreign users could also be a significant source of revenue, argues Greg Sterling, a consultant with Sterling Market Research. "If you've got the ad coverage, an international user is as valuable as anyone," he says.
In fact, Google's foreign advertising coverage has been spreading. The company's revenues from sources outside the U.S. and Britain, earned almost entirely from selling targeted ads, amounted to $1.24 billion last quarter, nearly twice the number from just a year ago. That brings the percentage of Google's foreign revenue to 60.8%, up from 46.7% last year.
While that spending might make Orkut an unlikely "heavy-weight" of social networking, as blogger Michael Arrington recently wrote, the site will need to gain a much larger U.S. audience to compete long-term with networks like MySpace and Facebook. MySpace still leads the social networking market by a large margin, and Facebook tripled its audience in the last year, according to comScore, while Orkut grew only 64%.
But Google, which won't disclose Orkut's revenue numbers, has recently been putting more of its massive resources behind the site. On top of this week's redesign, the company last year sponsored a social networking project at Carnegie Mellon to develop a tool meant to improve Orkut's domestic popularity. The result was Socialstream, a prototype for a site that allows users to post text and multimedia content to a single page, then syndicate that content to any social network where they have a profile.
Combined with Orkut, Socialstream might be just the sort of Googlish innovation that breaks down the "walled-garden" approach to social networking favored by Facebook and MySpace and brings American eyeballs to Orkut. If Google could provide Orkut with a competitive advantage, it could easily build a community from the audience that uses its services like Gmail, Google Docs and Spreadsheets, Google Maps, Google Calendar and its photo-sharing site, Picasa, says Sterling.
"Until now, Orkut has been an also-ran in the U.S. because it's been neglected by Google," Sterling says. "But with just a few tweaks and redesigns, and in combination with all of Google's services, it has the potential to really differentiate itself from MySpace and Facebook."
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Google's Secret Society, by Andy Greenberg for Forbes.com
