Google’s New Strategy For India
Back in 2006, Google’s chief Eric Schmidt told in an interview to TOI that India will emerge as the world’s largest internet market in the world. This statement was based on a few facts and figures that Google had analysed and it has come out to be true.
It does make business sense to change your strategy for a specific market that has the capability to offer you the maximum profits. So, Google has changed its offerings for India and will now come up with a mix of online, offline and mobile offerings. If we study about the tweak in strategy in detail, we would understand that this is a very well thought move.
With strict adherence to its mission statement, which is “to organise the world’s information and make it universally accessible and useful”; Google has divided the target market it caters to in three broad classifications viz. individual users, advertisers and enterprises. Search remains their USP in India and they obviously are the numero uno in India for the same too.
Social Media has emerged and Google’s 95 percent revenues come from advertising and thus the ads on Orkut deserves a special mention. Google India Managing Director Shailesh Rao says, “Google is now strengthening its focus on Tier II and III cities as part of its mission to target emerging users. This underscores its online strategy“. But, the scope of a mobile strategy is well advocated when Google India Country Head (products) Vinay Goel says, “There are around 55.5 million Internet users (2008 figures), as compared to 376 million mobile subscribers. It’s a no-brainer that this disparity will only widen in the days to come“.
Google has thus enabled search on mobile phones with an IVR facility and focused on advertising for the regional players to become national by offering services such as search engine marketing, brand advertising and offering offline help to ad agencies. This will be done by the usage of two main services Google Adwords and Adsense. Google has also ventured into the entertainment business with absolute supremacy and has struck up lucrative deals with UTV, Rajshri Productions etc. for its very own Youtube. Making Google Apps available via resellers and it’s success with Android is bound to be successful in India.
For sure, the online advertising revenue have grown slowly (refer my two last posts), but its hunger to throw up innovative strategies like The Mouse Over Rate and others, will surely help the company achieve what they want. The launches of 3G, Wimax, rural internet users, wider reach of broadband services etc. will only help Google achieve the profits that it has targeted with its new strategy.
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Deeptaman,
Do you actually believe everything you read in the papers? Eric Schmidt just massaged some egos and gave the ToI something to write about. How can you claim that it has come true?
Let me ask you some questions – would love to hear what you think!
1) How much money do you think Google makes from India and do you think they are profitable or at breakeven?
2) Do you honestly think Google/YouTube is making money from UTVi and Rajshri or is it the other way around?
3) What makes you claim that Google Apps (through resellers) and Android would set the market on fire? Google Apps is far too expensive (paid version) and unless Google radically changes their pricing for India – I see them making no headway. (They might crack a couple of Edu deals actually and get a lot of press).
4) Why hasnt the mecca for mobiles (India) seen an Android phone yet – while the Dream is being modified specifically for China?
While they are a great company (and have a natural monopoly as the gatekeepers of the Internet) – you should layoff the KoolAid for some time!
Deeptaman,
Do you actually believe everything you read in the papers? Eric Schmidt just massaged some egos and gave the ToI something to write about. How can you claim that it has come true?
Let me ask you some questions – would love to hear what you think!
1) How much money do you think Google makes from India and do you think they are profitable or at breakeven?
2) Do you honestly think Google/YouTube is making money from UTVi and Rajshri or is it the other way around?
3) What makes you claim that Google Apps (through resellers) and Android would set the market on fire? Google Apps is far too expensive (paid version) and unless Google radically changes their pricing for India – I see them making no headway. (They might crack a couple of Edu deals actually and get a lot of press).
4) Why hasnt the mecca for mobiles (India) seen an Android phone yet – while the Dream is being modified specifically for China?
While they are a great company (and have a natural monopoly as the gatekeepers of the Internet) – you should layoff the KoolAid for some time!
OH! You’re my new favorite blogger fyi
I somewhat agree with Rajesh. Internet revenues arising form ad does not make much sense esp with such high overhead costs.
The business model has to be different for India
http://www.geekevaluation.com
Rajesh,
Most of the times I actually believe most of the things in the newspaper. When it comes to news about Google, it is worth believing because newspapers publish stores which are true and avoid yellow journalism.
Let me ask you, How are you so sure when you say Eric Schmidt said the things to just massage some egos. Did he tell this to you in personal or is is just a guess from you. Or, is it based on some analysis that you have performed.
The answers to your questions are –
1. I do think Google is profitable when it comes to investments in India. I don’t know how much money do they make because I have not seen their books of accounts. Probably you can tell that better.
2. Google’s decision to enter into deals with UTV & Rajshri have been taken up by the big shots in their company. I don’t think I am big enough to analyze the intricacies involved in that decision. May be you would have some better insights there too.
3. The heading of the post says “Google’s New Strategy for India”. There has to be a change in the pricing strategies to be more effective in what they are doing. Your sure judgments about seeing them making no headway …… I will tell you – Just wait and watch. Let Time tell us the answer.
4. The new LG Android phone will be out by late this year. Check http://www.techtree.com/India/News/First_Android_Phone_from_LG_Soon/551-99045-893.html for more details. And for reasons why Android would be better than others, check this http://www.thewwwblog.com/why-android-phone-better-than-apple-iphone.html .. It is taking a bit of time, but all of us are hopeful that the wait would be worth it.
For sure, Google is probably the greatest companies ever and it has ‘earned’ itself the tag of having the natural monopoly as the gatekeepers to internet. ‘Earned’ is the keyword.
Whether I should lay off the ‘KoolAid’ or not ? You know what, I am more sure about things I do and write. I would appreciate if you could bring some more rationale thinking into your comments and could yourself answer the questions in a better way. Because, somehow I feel that no piece of answer from my end could satisfy your intellectual curiosity and make you turn into delivering the ‘KoolAid’ for Google.
Would look forward to it.