• by Erik Sass , Staff Writer @eriksass1, August 16, 2010

Facebook will break the $1 billion ad revenue barrier this year, according to a new report from eMarketer, which shows that the ubiquitous social network is poised for even more growth in 2011. That's great news for a free, ad-supported service with hefty data and server costs. What's interesting to me is how much of the ad revenue growth is coming from Facebook's network outside the U.S.

Per eMarketer, Facebook's total U.S. ad revenues will grow from about $500 million in 2009 to $835 million in 2010, and $1.06 billion in 2011. That equals a very healthy growth rate of 67% in 2009-2010 and 27% in 2010-2011. But non-U.S. ad revenue is set for an even bigger expansion, according to the eMarketer projections, from $165 million in 2009 to $450 million in 2010, and $700 million in 2011. That works out to annual growth rates of 172% in 2009-2010, and 55% in 2010-2011.

One possible explanation for this disparity is that foreign advertising revenue has lagged behind the U.S., and is growing faster simple because it's starting from a smaller base. Turning from percentages to actual dollar figures, however, overseas advertising (with its smaller base) still exceeds Facebook's U.S. growth, with overseas ad revenues jumping $250 million versus $235 million. In proportional terms, overseas ad revenues will rise from 25% of Facebook's total revenues in 2009 to 40% in 2011.

So the disparity doesn't just reflect the "law of large numbers"; Facebook's overseas advertising really is growing faster than its U.S. business. I'm wondering why this might be the case. My best guess is that Facebook's overseas membership is growing at an even faster pace than its U.S. membership. From May 2009-May 2010, the number of Facebook's U.S. users jumped from 70 million to 125 million -- as the number of overseas users soared from 157 million to 375 million over the same period.