Facebook Inc (FB) going for gold, invests in Asia-Pacific internet cable project
Facebook Inc (NASDAQ:FB) will collaborate and invest in the Asia Pacific Gateway project, which includes the development of an undersea cable network that will benefit eight countries in the Asia Pacific region.
It was reported on BBC yesterday that Facebook has agreed to invest an undisclosed amount of money in the project, which will have participation from among Asian telecom giants China Telecom and Malaysia’s Time Dotcom (stylized as dotCom). The construction of the underwater cable network will begin later this year and is expected to be completed by 2014, forecasts the project members.
A 10,000 km long cable is expected to be installed that will link Malaysia to Korea and Japan and will subsequently branch off to China, Hong Kong, Taiwan, Vietnam and Singapore.
Saiful Husni, CEO of Time Dotcom has indicated that the project will benefit Malaysia as the country would not have to depend on Singapore as much in regards to Internet connections.
Moreover, in the case of Facebook, it seems that Mark Zuckerberg’s social network also has among its plans the implementation of data centers in the Asia-Pacific. It only makes sense since Facebook doesn’t have the same fanfare it enjoyed couple of years ago and with a sharp decline in its growth and even sharper decline of its share price, Asia is a smart move.
Facebook’s main competitor Google had also invested in a similar cable building project a few years ago which resulted in improving its overall image in Asian countries and brought in millions of new users. Google along with other Asian companies had invested in a cable linking the US with Japan across the Pacific. It is believed that Google was responsible for 20 percent of the construction, which led to improving its services in Asian market.
Asia represents a huge growth opportunity for Facebook. A recent independent study notes that countries with the largest increase in Facebook membership are precisely in Asian region and investment in this market is likely to bring excellent financial returns.
Facebook Inc (NASDAQ:FB) shares have gained $0.27 in last trading session, raising price by 0.87% to $31.47. The company in extended hours yesterday faced a fall of -0.19% to $31.41 but still maintains monthly performance (last 21 trading days) up 21.65%. The stock ended June in positive territory, marking its first monthly rise since its May IPO.