The Facebook journey shows Asian businesses that to successfully develop a massive audience, they have to break out of their home region, says Jan Dawson, Ovum Chief Telecoms Analyst.

“While it is possible for Chinese services to generate a massive audience in the domestic market, most businesses will have to be relevant and win share across major regions including North America, Europe and Asia.”

Almost half of Facebook’s revenue is generated outside the US, and the proportion of its user base outside North America is well over half, he noted.

He warned that the biggest pitfall is when the major revenue source is advertising.

“There is an inherent tension between the needs of your users and the needs of your customers, the advertisers.”

He added that other businesses which may not have achieved the rapid growth of Facebook but have nonetheless grown and become profitable have instead used the ‘Freemium’ model, where they offer a basic set of services for free, and capture many users in this way, but then layer on premium services for a subscription fee. Some examples include Evernote and Hulu.

To Dawson, this aligns users’ interests better with the company’s interests and makes for a better long-term relationship between the provider and its customers.

Facebook’s success factors

Looking at Facebook’s IPO, Dawson says the biggest lessons from Facebook’s success are that it’s easiest to turn users into revenue and profit when businesses can find a way to serve up unobtrusive but relevant advertising to their communities.