The top 10 country codes (and the fall of China)

Verisign published its quarterly industry brief a few weeks ago.

In it, the guide includes the top 10 ccTLDs, reprinted below:

There are now more than 81 million registered ccTLD domains, which comprise about 40% of all registered domain names. Verisign says ccTLD registrations increased nearly 8% over last year. This is impressive given that China has really cracked down on .cn registrations over the past two years. For a brief period of time China was the leading country code, though a large percentage of these registrations were squatters. Here are the top 10 ccTLDs in late 2009:

So Germany is now firmly back in first place and China has fallen to fifth place.

But China may actually be in sixth place if you include IDNs.

I don’t believe IDN registrations are included in the ccTLD counts. For most countries, this isn’t a big deal because ccTLDs counts are quite low. But then there is Russia, with more than 800,000 registrations for .РФ. If you were to bundle IDN and ccTLD counts together, then Russia would surpass China and squeeze into fifth place.

 

World 3.0: Making Sense of a Semi-Global Planet

I received an advance review copy of Pankaj Ghemeawat’s new book World 3.0: Global Prosperity and How to Achieve It.

I greatly enjoyed his previous book, Redefining Global Strategy, calling it a valuable counterpoint to Tom Friedman’s book The World is Flat.

In his newest book, Pankaj sets out to chart a course forward that balances global integration (globalization) with regulation.

In light of the global recession, Pankaj does not want to see countries revert to an all-or-nothing approach to globalization — either embracing globalization with no checks or balances or completely closing the door to trade, immigrants, ideas, etc.

Of course, charting such a course requires making sense of a world that cannot be easily summarized in sound bites — something most American politicians seem unable or unwilling to do. The fact is, the globalization “train” has long ago left the station. We’re all connected, whether we like it or not. We can either choose to create relationships that benefit everyone or we can live with the outdated mindset that some countries must win at the expense of others. What I really appreciate about Pankaj’s writing is that he believes that globalization (properly regulated) can benefit everyone and he backs up these beliefs with plenty of data and recommendations for politicians, business leaders, and ordinary folks like myself.

What I most liked about this book was how Pankaj debunks popular misconceptions about globalization, which he calls “globaloney.” For example:

  • We have vastly overestimated how global we think we are. At best, Pankaj writes, we are semi-global. According to Panjak, global exports account for just 20% of global GDP. Cross-border Internet traffic accounts for about 20% of all traffic. And about 20% of VC money is deployed outside of that VC’s borders. And from where I sit, as one who studies web globalization, most companies are still very much in the early stages of figuring out how to expand globally.
  • Globalization has not, in fact, resulted in less diversity of brands, but greater diversity. He cites the auto industry, which is more diverse today than it was forty years ago. He stresses that globalization is not a one-way street towards homogenization.While there are Starbucks and McDonald’s seemingly everywhere, the US has seen its fair of share of international retailers set up shop here as well — from IKEA to Uniqlo. But more important, Pankaj illustrates how global brands are effectively localized to such a degree that they are just as local as they are global.
  • Successful global trade depends heavily on trust. And it’s easier to trust someone who shares your language, culture, and time zone. Pankaj cites data to show how trade levels drop the further two countries are from each other. He devotes quite a bit of ink to just how little trade is conducted between the US and Canada, despite our shared language, time zones, and cultures. Why is that? He cites obstacles like lack of harmonized rules and regulations, customs nightmares that hold up goods, and other seemingly minor details that, in total, give companies reason to rethink expanding beyond borders.

However, I think Pankaj does a bit too much debunking at times. Pankaj says that the “race to the bottom” of countries focusing on low costs at the expense of the environment, human rights, etc. simply does not exist. I disagree. He focuses on pollution largely but there are so many other issues that should be addressed.

For instance, factory farming is, in my view, an absolute atrocity and it is now being exported around the world via US trade agreements. That is, when the US exports meat that has been produced cheaply via factory farming, local farmers in other countries are forced to embrace factory farming to remain competitive or go out of business. A number of Korean family farmers committed suicide in protest of the recent trade agreement between South Korea and the US. Pankaj vastly trivializes these so-called “externalities” and, in doing so, overlooks what is one of the great (and growing) forces mobilizing against globalization.

That said, I recommend this book. Pankaj is one of a handful of writers who are tackling globalization, warts and all, in a thoughtful manner. Globalization is not a black and white argument; there are many shades of gray and this book does a very good job of shedding light on them.

The Top 25 Global Web Sites of 2011

I’m pleased to announce the publication of the 2011 Web Globalization Report Card. This year, we reviewed 250 web sites across 25 industries. The web sites represent nearly half of the Fortune 100 and nearly all of the Interbrand Global 100.

Out of these 250 sites, here are the top 25 overall:

Google, which has held the number one spot for years, was unseated by Facebook this year. Facebook’s recent innovations (multilingual social plugins, improved global gateway, multilingual user profiles) gave it the edge. (I’ve devoted a separate report to Facebook’s innovations.)

Companies like 3MCiscoPhilips, and NIVEA have become regular faces in the top 25. But there are some new faces as well. There are five companies new this year to the top 25: Volkswagen, Adobe, Shell, Skype, and DHL.

Although these 25 web sites represent a wide range of industries, they all share a high degree of global consistency and impressive support for languages. They average 58 languages — which is more than twice the average for all 250 sites reviewed.

The average number of languages supported by  all 250 web sites is 23, up from 22 last year. As the visual below illustrates, language growth over the years has been amazing. Seven years ago, I was thrilled to find a web site with more than 20 languages. Today, 20 languages is below average.

Language is just one element of web globalization, but it is the most visible element. When a company adds a language, it is making its global expansion plans known. If you want to know where your competitors are betting on growth, spend some time looking at their local web sites. More than twenty companies added four or more languages over the past 12 months.

Fast-growing languages on the Internet include Hungarian, Turkish, Indonesian, and Russian. Here is where Russian stands today — now found on nearly 8 of 10 web sites:

In the Report Card, languages account for 25% of a web site’s score. We also evaluate a web site’s depth and breadth of local content, the effectiveness of the global gateway, and overall global consistency. Beginning in 2010, we have also begun tracking how companies promote local social platforms such as Facebook and Twitter around the world. Our goal was not only to highlight the leaders in language but to identify those web sites and services that were globally “well rounded” as well as innovative.

The top 25 web sites are not perfect. The Report Card details many ways these sites could be improved (including Facebook and Google). That said, the executives who manage these web sites and services deserve a great deal of credit. As someone who has worked as both a consultant and an employee at companies such as these, I know how challenging it can be to get the funding to add languages and staff and to educate various teams on the many complexities of web globalization. While it may be the company names that appear on the top 25 list, it is the hundreds of passionate and bright people who got them there.

Congratulations!

Twittering in Tongues: How companies are going global with Twitter

Over the past six months, Twitter went from mostly serving people based inside the US to mostly serving people based outside of the US.

Source: Twitter.com

Today, 60% of Twitter’s 105 million registered users are based outside of the United States.

And half of all tweets are in a language other than English.

This is a remarkable trend, particularly since Twitter has only been localized into five languages so far.

A few months ago, I set out to better understand how large, multinational companies are using Twitter to reach users around the world.

I studied more than 225 companies across 21 industry verticals (representing 80% of the Interbrand 100). And I interviewed a number of people who manage Twitter feeds in different markets.

This work resulted in the report Twittering in Tongues. This report is a first stab at a phenomenon that is very much in its early days, so it’s hard to draw any sweeping conclusions. But there are some clearly emerging trends, which I discuss. I also highlight a number of Twitter’s inherent international limitations and provide some recommendations for companies considering localized Twitter feeds.

Here are a few findings/recommendations from the report:

  • Most companies have yet to launch international Twitter feeds. Only one-third of the 225 companies studied support one or more Twitter feeds outside of their domestic markets. What makes this ratio interesting is that every one of 225 companies studied supports two or more localized web sites. So these are all companies that do business in three or more countries. A number of companies that support more than 20 local web sites still only use Twitter for their domestic markets.
  • Sony leads the pack with support for 20 international Twitter feeds, mostly through its Sony Music division. Microsoft, Cisco Systems, and PricewaterhouseCoopers are also out in front with support for 10 or more country specific Twitter feeds. CAVEAT: Counting feeds is a tricky business. Not all corporate feeds are actively managed (which I did not count) and not all local feeds are easy to find.
  • Brazil rules. Brazil is by far the most popular Twitter market outside of the US. Nearly half of the companies that support one or more international feeds have targeted Brazil. Not surprisingly, Brazilian Portuguese is the second most popular language used on Twitter.
  • Local Twitter success depends on local web site promotion. It’s also no surprise that the local feeds with some of the highest numbers of followers also had high visibility on their local web sites. Companies such as Dell and Samsung lead in this respect. Below is a screen shot from Samsung’s Brazil home page; Twitter gets prime real estate.
  • Twitter is local by design. Based on my interviews, most of the in-country Twitter feeds have been launched without any central approval process or even awareness. This also applies to local Facebook and YouTube pages. The evolution is local Twitter feeds is similar to the evolution of local web sites in the 1990s. Back then, local offices often created their own sites, with their own designs and platforms. Over the years, the central offices reined in these disparate sites — sometimes going too far and dampening local enthusiasm. The key challenge I see executies facing now is balancing local control with global consistency. While consistency is important, it should not come at the expense of local enthusiasm and innovation. In the end, the success of local Twitter feeds depends on the local offices.

For more information:

It’s a round world after all

I recently finished reading Redefining Global Strategies: Crossing Borders in a World Where Differences Still Matter by Pankaj Ghemawat.

Redefining Global Strategies

This book provides a strong counterpoint to Tom Friedman’s The World is Flat.

While The World is Flat may leave an executive thinking We have to be in Brazil and Russia and China and India yesterday! Pankaj emphasizes a more measured, sober approach to expanding globally. He also makes a good case for looking beyond the BRIC countries.

Pankaj argues that there are very few truly global companies. Most companies are going through a phase of semiglobalization in which “levels of cross-border integration are generally increasing and, in many instances, setting new records, but fall far short of complete integration and will continue to do so for decades.”

Pankaj says that companies should ask themselves if they should even go global to begin with. At a minimum, he recommends that companies apply his “CAGE distance framework.” CAGE refers to the four types of distance that companies must overcome to succeed in a new market: Cultural, Administrative, Geographic, and Economic.

This is a dense book and it feels academic at times. But don’t let that stop you from reading it. It is an important book and could help many executives avoid a lot of headaches as they invest millions and millions in, say, Brazil or Russia or India or China.

Here is a blurb from a New York Times review:

Very few companies are globally global, Mr. Ghemawat observes. Even Toyota became No. 1 in autos by linking operations within the Americas, within Europe and within Asia, rather than across them. Definitions of region can vary — not just continents but trans-Atlantic, Greater China, trans-Indian Ocean, Eurasia — and Mr. Ghemawat examines a variety of regional hub strategies. But the latter, too, is no strategic panacea: regional platforms can grow into regional fiefdoms.

“Nobody has figured out the optimal way to organize a complex global economy,” he concludes. That is because no single optimal strategy exists. Companies are left to pursue what Mr. Ghemawat labels A.A.A:  — adaptation, aggregation, and arbitrage — or, in straightforward English, multiple variants of individual tailoring.