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Google’s recent earnings report focused on their aggressive hiring in international locations. Eric Schmidt, Google CEO, explained that searching the Internet is now a global activity, and in order to compete with Yahoo!, Microsoft and, increasingly, local competitors like Baidu, Google’s staff has to become more international. Google has also developed a “cross-language informational retrieval” service, which translates foreign-language content for English-language searches (and vice-versa). According to one blog, translations will be available in English, Arabic, French, German, Italian, Japanese, Korean, Mandarin, Portuguese, Russian, and Spanish. Google’s “world-is-flat” macro approach will appeal to more Internet-savvy users interested in international news and opinions.
Yahoo!’s approach to international markets is slightly different. The company offers a language-translation program similar to Google’s, but a more intriguing initiative is the attempt to attract local users in developing countries by turning their search engine into citywide portals. Yahoo!’s India-based pilot, Our City - an online clearinghouse for local, dynamic content - has been introduced in 40 Indian cities and appears to have gained a solid user base. Yahoo!’s more localized approach will meet the demands of new users who are just beginning to access the web and are most interested in locally-relevant information such as government services, news, entertainment and events. While a combination of approaches is likely the best strategy for emerging market business success, a focus on locally available services and content will motivate the next billion PC users to take the Internet for a test drive.
Yahoo!, Google, and other IT companies should have no trouble finding local content. Small and medium-sized businesses (SMBs) are eager for sales opportunities outside their brick-and-mortar confines, and governments in many emerging-market countries are investing heavily in e-government portals and support for the SMB sector. Smart local entrepreneurs with intimate knowledge of local content needs could act as aggregators, benefiting from the technology, resources and scale of a multinational technology partner. All stakeholders understand this would result in more emerging-market users online, creating potential consumers of other online content and services. Also in the news:
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May 2, 2007
Steady Innovation Primes Yahoo! for Growth in India
Yes, there was other news amid the OLPC/Intel hullabaloo this week. This week’s nugget comes from India, where Yahoo! has been steadily rolling out new products, services and strategies.
India’s Business Standard newspaper provided details about some of Yahoo!’s efforts – increased executive staffing, enabling Yahoo! Maps for Indian cities, and city-specific portals featuring localized, user-generated content. Portal users can find photos, videos, maps, podcasts, event information and blogs for 20 Indian cities.
Vital Wave Consulting likes Yahoo!’s relatively quiet approach to these strategic initiatives. Perhaps taking a page from the chronicle of success written by the telecommunications industry, Yahoo! is letting new products and services find traction before making big announcements about them.
The real opportunity for Yahoo! is the potential to radically scale the more successful services throughout India. There are currently 25 million Internet users in India, and usage is increasing most dramatically in urban centers. The number of Indian cities with million-plus populations grew from 23 to 35 between 1991 and 2001. By now, there are more than 40 Indian cities with a combined population of 500 million – all potential customers for Yahoo!’s new services.
Also in the news this week
March 14, 2007
Think Global, Partner Local
Professor Pankaj Ghemawat of Harvard Business School poked a hole in the world-is-flat version of globalization in the current edition of Foreign Policy magazine. Ghemawat points out that “more than 90 percent of all phone calls, Web traffic, and investment is local,” and that most Web users chat with local friends or e-mail family rather than connect with someone overseas. “We’re more wired, but no more global.”
The preference for local, relevant content may account for the struggles US-based companies like Google, Yahoo, and eBay have faced in transplanting their success to emerging markets like Russia and China.
To win these markets, multinational tech companies are wisely experimenting with different business models – partnering with local competitors, surrendering overseas operations to local players, or signing up proven consumer champs like Pepsi and Procter and Gamble to find new advertising revenues.
There is a clear opportunity for SMB’s in developing countries to partner with multinational search and e-commerce companies to collect and deliver locally relevant content. Soon, it will be possible to identify a user’s location as soon as she logs on. The company with the strongest roster of local content providers will achieve the most business growth in that environment.
Also in the news this week
