An Insight on Facebook and Twitter’s “Revenue” in Indonesia

KlikIndonesia, as cited from Varia.id, suggested that $1,2 billion (around Rp 15 trillion) goes to foreign internet service providers annually, with $500 million of them goes to Facebook and $120 million by Twitter. It’s huge, yes, but is the data reliable?

Before we go deeper on that claim, we want to admit that we don’t have any idea about which method KlikIndonesia used upon generating the claim (did it use normal calendar or fiscal year). So, we assumed that the survey went on during the first to last quarter of 2013.

During that period, according to Facebook’s published figure, Facebook earned $7,872 billion in total (bruto), in which $1,063 billion of them came from Asian market. If KlikIndonesia’s claim is true, then Indonesia contributed to around 50% of Facebook’s earning in Asia, which is amazing.

If that so, then I would suggest Facebook to put all of its focus on its operation in Indonesia and make the office in Jakarta as its regional headquarter, and not the one in Singapore, Hong Kong, or Tokyo. However, the truth is, while enjoying its best performance in Indonesia, Facebook has only had five full-timers working in the country, and the Country Manager even still goes back and forth between Jakarta and Singapore.

Now we’re moving to Twitter’s financial report. During 2013, Twitter enjoyed $665 million revenue globally. So, again, if KlikIndonesia’s claim is true, then 20% of Twitter’s revenue came from Indonesia. That’s just massive, particularly for a company that still had loses back then during the year.

Thus, if it’s not taken from the companies’ financial report, then from where did the figures appear?

Well, there is apparently another method of calculating the average of revenue using the ARPU (Average Revenue Per User). It’s so simple to use, just multiply the ARPU with the total number of users and we’ll have the number.

According to Digital Strategy Consulting, Facebook’s ARPU during the fourth quarter of 2013 was $7,76, while Twitter follows with $3,65. Now, if we divide the number suggested by KlikIndonesia with the ARPU, then we’ll get 64 million as the result. That’s the total number of users using Facebook, and it is in line with the fact that Facebook has 69 million active users in Indonesia.

The same condition applied to Twitter, as the calculation resulted 33 million active users.

In the end, whether the claim was valid or not, KlikIndonesia has made one undeniable statement, that Indonesia is unquestionably a promising place where various popular internet-based services can enhance their revenue significantly. Facebook and Twitter’s decision to open their office in Indonesia is an ultimate indicator to this.

Is it an opportunity, challenge, or even threat for local startups? You decide.