Social networks in Russia 'set for rapid expansion'

Yuri Milner Mr Milner's firm has invested $1bn in Russian and foreign internet companies

Social networking in Russia will grow further due to its climate, size and big pool of engineering talent, a leading investor has told the BBC.

Yuri Milner, head of Digital Sky Technologies (DST), said that internet penetration in Russia could reach 85%.

He noted that Russia, China, Japan and South Korea were the only countries apart from the US to develop many websites aimed at the local audience.

Facebook is also eager to advance in the four countries.

In recent years, DST has invested about $1bn (£670m) in many Russian and foreign internet companies, including Vkontakte.ru, a leading social network in Russia, and Mail.ru.

It also owns a stake in Facebook and has recently bought popular online chat service ICQ from AOL.

Cold climates

There are about 40 million internet-users in Russia and more than 60 million Russian-speaking users in the world, with a potential audience of more than 300 million people, according to DST.

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Mr Milner told Russia Business Report that as Russia was "a big place" and people were spread around, social networking allowed them to stay in touch.

In addition, he said that internet penetration in countries with colder climates, such as Russia and Norway, was higher than in warmer countries - for example, Italy.

In colder countries, people tend to stay inside more often and so use the internet more extensively.

"I think that Russia is moving in the direction where internet penetration would be 80-85% over time, as opposed to 50-60% [in many other countries]," said Mr Milner.

New approach

Mark Zuckerberg, the founder and chief executive of Facebook, said last week that Japan, Russia, China and South Korea were the only countries where his social network was not the leading one.

Speaking at the Cannes Lions advertising festival, he said that Facebook had only one million users in Russia, although he added that the figure was doubling every half-year.

Vkontakte.ru has around 70 million registered users and over 14 million visitors daily, according to DST.

Mr Zuckerberg said that the time had come for Facebook to stop relying mostly on organic growth.

However, he did not specify what Facebook's new approach was going to be, saying only that "now for the first time we are focused on doing some specific things in specific countries".

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