Inside Facebook

Facebook’s audience in Germany has just crossed over 2 million monthly active users – a number that outpaces Inside Facebook’s growth projection of 1.8 million users by May 1, 2009, according to our Facebook Global Monitor.

In the last 12 months, Facebook’s audience in Germany has grown by 260%. Germany now has the 18th most Facebook users of any country, leading Norway and Hong Kong, but trailing behind Denmark and Belgium.

However, relative market penetration in Germany is still low. Facebook’s main competitor in Germany is Berlin-based social networking service StudiVZ. Started in 2005 as a social network for college students, StudiVZ now boasts over 13 million users.

In 2007, it was sold to a German publishing group for possibly up to 100 million Euros. A year later, Facebook filed suit against StudiVZ for intellectual property infringement, a move that lead industry speculators to wonder which Facebook clone was next. Xiaonei?

Facebook hasn’t faced difficulty gaining market share in Germany alone. Our recent look at the Chinese market, for example, shows the challenges Facebook is having there. In general, by the time Facebook fully localizes in key emerging markets, local clones will likely have already won over the hearts of local Internet users. And while the cost of transition isn’t high for these users to switch to Facebook one day, it isn’t low either: Facebook would have to convert a critical mass of users for the switch to be worthwhile for the others.

But Facebook has demonstrated creative efforts to acquire users in the German market, including the Facebook German Application Contest, Facebook for Good – Germany, and even recruiting Facebook ambassadors in Berlin and Munich.

In related news, Germany’s largest newspaper, Bild, recently implemented Facebook Connect – a sign that other local media companies are hopeful of a stronger Facebook presence in Germany.