Pacebook: Orkut's fate shows how stupid land grabs are

By Sarah Lacy , written on July 9, 2014

From The News Desk

The sad fate of Orkut proves what I’ve been saying about Groupon for years

It’s one of the easiest things to say but one of the hardest things for an entrepreneur to do: Ignore competitors and run your own race. Every startup has a different path, but by and large pacing and fighting one battle at a time wins over a total-no-holds-barred land grab. That’s especially true when it comes to international expansion.

In the first generation of the Web, companies were mostly happy to conquer the world after they’d dominated America-- even if they were pretty arrogant and awful about it when it came to companies like China.

But, in an era of the Samwer brothers, wild copy cats and mobile companies that go global in an instant, companies increasingly felt they had to go global before someone beat them to it. No matter what it cost them. In the case of Groupon, the cost was their margins. In the case of Fab, it may have been even worse.

The company that may have played this best of all is that master of pacing, Facebook. It’s taken a decade, but Facebook has finally waited out competitors in one of the largest markets in the world: Brazil. Orkut -- owned by Google-- was strangely dominant in Brazil, and early on a confident Facebook simply focused on other markets, knowing eventually the desire to be connected to the rest of the world and Google’s lack of focus on Orkut would mean Facebook would win out. Even as recently as 2009, people were freaking out about how Facebook simply couldn’t compete with Orkut.


Facebook did plenty: Continued to focus on its core and not freak out. Sure enough, Facebook passed Orkut three years ago and this weekend, Google alerted users that Orkut would be finally shuttered for good. This isn’t a game of Risk. On the Web, “winning” a country isn’t a simple as planting a flag and walking away. Execution in another country is brutal. Better to let someone else fail and come in and mop up as a stronger global incumbent later.