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Facebook struggles to sell advertising in India

© Reuters. Computer screens display the Facebook sign-in screen in this photo illustration taken in Golden

By Yasmeen Abutaleb and Nivedita Bhattacharjee

SAN FRANCISCO/MUMBAI, August 12 (Reuters) - Facebook (NASDAQ:FB) is trying to lure skeptical advertisers in India with features such as free email support for questions about advertising and advice on increasing sales in a bid to boost revenue from its second biggest market.

Facebook has 132 million users in India, trailing only the 193 million in the United States, according to the company, and the country is critical for the Menlo Park, California, social network's global expansion.

But so far, the payoff has been small: Facebook earns 15 cents per user in India every quarter, compared to the $7 to $8 it makes on each U.S. user, according to analysts.

Facebook does not break out its revenues in India, but Neil Shah, an analyst at Counterpoint Research, a Hong Kong-based technology consulting firm, estimates it brings in $15 million a quarter, far behind the $350 million he estimates Google earns there per quarter.

Google, which set up in India in 2004, has been in the Indian market six years longer than Facebook, and its search ads are more familiar to advertisers there than the display ads Facebook offers.

The business-boosting features, described to Reuters by company executives and Indian business people, are aimed at advertisers such as Mohit Khattar, managing director at online grocery company Godrej Nature's Basket, one of the roughly 60 to 65 million small- and medium-sized businesses in the country.

He said he began advertising on Facebook about two months ago as the company ramped up its online presence. He found that advertising...


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