The online search giant has tweaked its global strategy for India with a mix of online, offline and mobile offerings.
Google has an unwavering mission statement — to organise the world’s information and make it universally accessible and useful. Globally, it has been very successful in doing so, and is leagues ahead of rivals like Yahoo! and now Microsoft which has entered this space with its “Live” offerings.
The online search giant, however, faces a piquant situation in India. Over 95 per cent of its worldwide revenues come solely from online advertisements which are displayed when you do a Google search for keywords on the Internet. In this country, however, more people are offline than in cyberspace and mobile devices outnumber Internet connections.
So what does Google do? It tweaks its strategy to cater to its three broad target segments — individual users, advertisers and enterprises — with a mix of online, offline and mobile offerings as the situation demands.
Search remains the cornerstone of Google’s top-line in India too, and online ads, which are displayed alongside the keyword searches by individual users, continue to account for a bulk of its revenues.
“We have a leadership position in the search space in India too,” says Google India Managing Director Shailesh Rao. “Besides, we operate four of the 10 popular websites in India. With Orkut, we are also the leader in social networking. We are ensuring that Indians have access to search capabilities on their mobile devices too.” 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.
However, Google’s play in India cannot be complete without a mobile strategy, explains Google India Country Head (products) Vinay Goel. 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.
So Google went about making search available on mobile phones too. “There has been a significant increase of mobile search users in 2009,” claims Goel. It then made Orkut (its social networking site) and Google Maps also available on mobile phones.
However, the number of Internet-enabled mobile phones is still small (estimated to be around 15-20 per cent of all handsets). So Google launched an SMS-based search too, which can give users information on various topics, including local business listing, the status of flight and train bookings, stock quotes and horoscopes.
Last, but not the least, for those who rely only on voice, Google has devised a phone search which involves an interactive voice response facility that throws up the results accordingly. Goel says: “We believe that users graduate from plain voice search to an SMS-based one and finally to Internet-based search, which is our goal. The advent of 3G (and with it speedier broadband) will only help our cause.”
For advertisers, Google’s strategy broadly revolves around search engine marketing, helping regional players become more national, brand advertising and working offline with ad agencies.
“We help Indian businesses to take advantage of search engine marketing (SEM) so that they can become more efficient and go global,” explains Rao. SEM is a term that describes marketing a website using various techniques to make it more visible on search engines. These include search engine optimisation, buying pay-per-click ads or a combination of both.
Google also helps regional players to become national by educating them on the importance of the Internet. “We help these businesses build campaigns on the Internet,” explains Rao. The company has both online and offline teams in India to assist these firms. It has organised these teams into five broad “industry practice areas” — financial services, travel, telecom, media and entertainment and classifieds.
Brand advertising is another focus area for Google. This includes advertisements on Orkut and taking advantage of Google’s AdSense network. Google earns most of its revenue by allowing other website owners to advertise on their search result pages.
All this is managed through a programme called AdWords. One can earn a share of the revenue that Google earns from AdWords by displaying the same text ads on one’s site. In other words, one ends up helping Google advertise and the company pays a percentage of what it earns. This programme is called AdSense.
“There are thousands of Adsense publishers in India. Business can easily leverage the network. For instance, an auto manufacturer can identify auto-oriented publishers and help them build a brand campaign,” says Rao. Google also has dedicated offline teams working with agencies.
Google has also struck deals for YouTube (which it owns) with top Bollywood producers such as UTV, Rajshri and Yash Raj Films, among others. YouTube traffic from India has grown ever since its integration with Orkut.
Incidentally, enterprise penetration has always been the search giant’s Achilles’ heel. To fill this gap, it has launched many products for Indian businesses to tackle biggies such as Microsoft and IBM, whose enterprise play has helped them make decent money. Its offerings, however, are based on the software as a service model. “These services are made available on a hosted basis. Hence, businesses don’t have to spend money to maintain an IT staff. This comes particularly handy during a slowdown,” says Rao.
Called Google Apps, it’s a service for using custom domain names with several Google products. It features several web applications such as traditional office suites, Gmail, Google Calendar, GTalk, Docs and Sites. The standard edition is free and offers the same amount of storage as regular Gmail accounts. The premier edition, which offers 25 GB of e-mail storage, comes for $50 (around Rs 2,500) per year, per account. The education edition, which is free, combines features from the standard and premier editions. This January, Google added Google Apps to the Google Labs suite. This allows users to add gadgets to their inbox, such as “Offline”, “Tasks” and “Vacation Time!”.
Google largely sells Google Apps through resellers, Rao adds. They benefit from a recurring discount on the annual Google Apps licensing fee (understood to be around 20 per cent) and Google also provides support, training and tools for sales and marketing. Resellers focusing on project-based revenue can manage customer deployments, including data migration, provide user training and best practices, tackle systems integration and develop custom application extensions.
Finally, Google’s global success with Android (an open software platform which any handset manufacturer could use) is bound to rub-off in India and will add to its bottom-line. “Pricing is the key to Android’s success in India,” asserts Goel, adding: “While pricing is the prerogative of each handset manufacturer, the Rs 10,000 figure is a sweet spot.”
Some of the key drivers for Google in India, according to Alok Shende, principal analyst, Acsendia Consulting, include aggregate ad spends “which are now increasing at a slower pace compared to last year with companies’ online advertisement spends being affected by a slowing economy”. Shende believes that mobile phones “reflect a significant upside opportunity for the growth of Internet users”. Further, he adds, the launch of 3G and Wimax will give a big filip for further penetration of broadband in India. Rural Internet users constitute a mere 10 per cent of the total Internet market, he notes, adding: “With rising rural incomes, a broad swathe of vernacular language users will come on board for which Google is ready with it’s local language offerings.”
