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THE GOOGLE INDIA STORY

BY IMPACT Staff

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Google India has come a long way since setting up offices in the country in 2004. Despite postrecession cynicism and sluggish growth of Internet advertising, it has built on technology and strength, and is all set to take a lead in the emerging Internet display and mobile ad business.

When Sergey Brin and Larry Page first met at Stanford University in 1995 and worked on a project called BackRub, they hardly anticipated that in two years’ time, BackRub would metamorphose into the giant Google. ‘Google’ is a word close to a mathematical term ‘googol’ which means number 1 followed by 100 zeros. Almost nine years later, in 2004, Brin and Page realized that India is a very, very dynamic country when they called on the President of India. The same year, they first set up shop in Bangalore in October and then visited Hyderabad to officially announce another engineering office of their technology company. It was their big move, and the journey of the world’s largest Internet giant had begun in India.
 

Today, there are millions of websites that have silently broken the ‘nation-states’ theory, and over 100 million Indians who use these websites for several reasons, but what remains unchanged is Google’s unmoved identity among Internet users and its consistent user base. “In the early Internet days, 80% Indians visited www.google.com to check whether their Internet connections were working or not. Today, Internet is working very well in India and so is Google,” recalls the digital head of a leading media planning agency, recollecting how Internet was synonymous with Google when the web was a new medium.
 

The web has grown exponentially and some among the millions of users have grown the business of Internet significantly. Google is one among many, but a very strong technology leader in the space. Google is Google Search for the latest Internet users who have probably just begun to double click the browser icon on their desktop. Somehow, in the advanced advertising business too, search advertising is synonymous with Google India. Yahoo! too has its share in the search space which is reasonably robust, but Google is leading this space and its early entry in the business is not the only factor why it stands out in the search market.Google is yet to achieve the same status and stature in the display advertising business too in India, which to the surprise of many, has been growing at a very fast rate in the last three years.
 

Google was a late entrant in the display advertising business, but video advertising, which is a part of the fast-growing display ad business in India, has contributed significantly to Google’s display which registered a staggering 100% growth last year as against the regular 40% growth rate of the display industry. “That’s good news for us. Display advertising category in India is growing at a faster rate than it ever did before,” asserts Rajan Anandan, Managing Director and Vice President, Sales & Operations, Google India. “Our display business is a significant part of our overall revenue in Google India,” he adds. A recent report by IDC, a global market intelligence firm, claims that Google has overtaken Facebook in the US market in the display advertisement category. While the Indian Internet market dynamics is vastly different, the company is expecting a parallel story for the Indian market too. Therefore, display is top of Google’s priority in the coming years and it has achieved partial success in this space already, despite dominance of Facebook and Yahoo! in India.
 

Two of its core properties- YouTube and mobile operating systems - have contributed most to this growth. While the number of YouTube users crossed the 25 million mark in India, which is double of what it was about a year back, the Android operating system also found its anticipated space in the Indian mobile market. It is not coincidence or early entry in the Internet business, as competitors may believe, that has made Google a giant in some crucial areas of the digital world like search, email, video and maps; but its consistent human and monetary investments in innovation. “Innovation is at the core of Google, globally as well as in India. Around 2,000 employees in India are working on innovations in some form or the other,” explains Anandan.
 

GOOGLE REFRESHED

After USA, Google employs maximum professionals in India - close to 2,000 working professionals in the domains of technology, sales and operations, marketing, communications and R&D. As more users and advertisers go the online way, Google has internal expansion plans on the cards too. Though many in the industry would refer to Google as a technology company, recent developments in the company reflect that its approach in India is beyond just technology and R&D. Recently, the company tripled the number of its sales officials in India. Despite postrecession cynicism and sluggish growth on Internet advertising, under the leadership of Shailesh Rao, the company was quick to realize in 2010 that it will be imperative to communicate very closely with marketers and media agencies in India to strengthen its other business areas apart from building up on the technology front. Reason - inclination of marketers towards Internet and mobile media as a result of growing number of Internet, mobile and smartphone users and the role of digital media in the media mix of leading advertisers. What also reflects its close association with marketers and inclination towards marketing activities are recent top and mid-level appointments in its India structure - Praveen Sharma of Madison Communications who joined the company in 2010 and the recent appointment of Punitha Arumugam of Madison Media Group. The R&D team at Google is also one of its core strength areas, which works not just for India, but is in close coordination with its global counterpart. Google engineers do not just work with India-specific content and technology in mind. They have also started contributing to the company’s global offerings.
 

INVESTMENT PLANS

India is the third largest Internet market for Google in India and it will not be surprising if it becomes the second largest market in the near future. Anandan believes that while Internet in India has been growing at a fast rate and millions of small and big Internet players have benefited from this revolution, all the verticals of Google have registered robust growth over the last few years. “We are in a hyper growth mode. Our display advertising business has grown by 100%, search advertising is growing at a rate of 60%, enterprise business is growing at 300% rate year-on-year, mobile YouTube is growing at 300% year-on-year. Chrome has become the number one browser,” he informs. “It is a very, very strategic market for us and we are investing big time on everything.”
 

GOOGLE’S TAKE ON DIGITAL INDUSTRY

Positioning of the Internet has shifted from usage to utilitarian web consumption for both the Internet in general and Google in particular. Internet has crossed the 100 million user mark and is expected to touch 300 million in the next three years. “In the last 18 months or so, people have been using the Internet to research products and services, buy products online, pay bills, etc. So, it has become very utilitarian, which has implications on marketers,” elaborates Anandan, when asked in what direction the industry is headed. His list of landmark Internet milestones includes boom of e-commerce, growth of social media, increase in smartphone usage and videos which witnessed multifold expansion in the last two years. Both digital and mobile media are in the evolving stage in India. While print and TV are growing at 3.5% and 5.5% respectively, Internet registered 42% growth by the end of 2011. While the usage of the online medium almost brings it into the list of mainstream media, the biggest bet for Internet publishers is monetization. “Mobile is still in a nascent stage from monetization point of view, but from user point of view, it is a potential medium with close to 50 million users and we believe that this year it will double. India will become a massive mobile Internet user market. Google has a big role to play in mobile Internet, both in terms of getting people on mobile Internet through Android operating system as well as advertisers in terms of services,” says Anandan. Google is betting high on its entry into the social media space. With close to 10 million Google Plus users in India, as against 48 million unique Facebook users, Google is hoping to expand the social media space and utilize the existing 60 million social media user market. “RoI in the online space is very high. Overall, there are close to 16,000 advertisers on TV and radio. Total number of advertisers who advertise on digital media is well above 25,000. It will be a preferred destination of advertisers for very focused and targeted advertising,” adds Anandan.
 

NEED FOR A WEB REGULATOR

Several governments in the world have initiated steps to censor seditious online content. While Google believes that such will not be the case in India and self-regulation will continue to prevail for all means of communication, there are regulatory interventions needed for penetration and affordability of Internet. In India, only 8% of the population is connected through Internet and this number is expected to go up significantly in the near future as literacy and penetration of technology fuels growth. This connectivity will require better bandwidth to connect. “The regulator has a role to play in ensuring bandwidth. Secondly, you want to make sure that there is free and open Internet. We should ensure that Internet is accessible and open. We have a big debate on that right now,” says Anandan. When we see the role Google is playing in the regional content business, there are eight languages that Google operates in besides English and it is expected to grow. “Most of the next 200 million will not speak English. We need content that has local language, applications that are in local languages, entertainment on the web and the mobile web,” adds Anandan. He believes that steps like providing free websites to Indian SMEs and connecting more people to the Internet will also require governmental support in the near future.
 

BIG BETS OF GOOGLE IN INDIA

 

DISPLAY BUSINESS

Google India is new in the Internet display business. However, its display business has attracted 20 of the top 25 advertisers of India, who advertise on Google. Display business of Google is growing at a rate of 100% year-on-year. The reach is about 90% of the Internet population in India and across 50,000 websites. YouTube is one of the most crucial areas of Google’s display business in India and has crossed the 25 million unique user mark. The number of YouTube users doubled in the last one year.
 

MOBILE AND TABLET DEVICES

Google is banking heavily on Internet usage on mobile devices which is expected to be a mobile-led revolution. Rajan Anandan believes that 2012 would be a crucial year for the company as the number of mobile Internet users in India is expected to double. Google’s mobile operating system Android has been its biggest success story globally with close to 800,000 new users a day and 100 compatible devices. India has been a key contributor to this user base. Increase in 3G penetration and low cost mobile devices in India is expected to fuel the adoption of Android device penetration radically.
 

SMB (SMALL AND MEDIUM BUSINESSES)

There are close to 8 million small and medium enterprises in India, but only 5% of them have a website. Though Google was eyeing the Indian SMEs for a long time, it officially opened the ‘India Get Your Business Online’ programme in November last year. It is aimed to offer free websites, domain and hosting services to small and medium businesses in India. Around 50,000 websites have already registered online. Google is also hoping for a large number of mobile first enterprises to enter this space.
 

ENTERPRISE

Enterprise is another important source of revenue for Google India, apart from advertising. A recent estimate projects that enterprise services, which is the cloud-based services market, will be a Rs 2,225 crore business by 2015. Google has extensive plans in India to develop this business as it believes that the adoption of such services will grow exponentially.
 

ADMOB

Google’s AdMob acquisition was a giant leap for the mobile advertising world in 2009-10, globally. India is AdMob’s second largest market, only behind the US. Google’s focus is to reach out to consumers as well as enterprises, as it believes that India will be a mobile online first market for several enterprises in future.
 

Feedback: rahul.dubey@exchange4media.com

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