Google’s decision to restructure different facets of the business under a new holding company, Alphabet, could have huge benefits for Internet penetration in developing markets across Asia, giving advertisers more channels to reach the masses.
Earlier this month, former Google chief executive (CEO) Larry Page announced that the brand’s expansive portfolio would be broken up and reformed into separate companies with their own CEOs under the Alphabet umbrella. The new streamlined Google brand will continue to include search, ads, apps, maps, YouTube and Android.
The greater autonomy for Alphabet products now falling outside the Google brand name could be particularly good for mobile and Internet penetration rates for developing markets like India, according to Bangalore-based Parth Mukherjee, head of marketing at Jifflenow. Mukherjee points to the Indian smartphone market, which still accounts for less than 20 percent of all phones sold, despite Google’s push to launch Android One smartphones into the market last year.
“Much of the operating system (OS) market [in India] will be driven by how many integrations they are able to pursue with hardware manufacturers, and Android already has a big lead in that matter,” Mukherjee says, adding that start-ups in the region may also be impacted.
“I’m very excited that Google Capital and Venture will be directly under the founders; that does mean a lot more focus on those initiatives and more opportunities for start-ups in Asia becoming a part of that family,” he adds.
Mukherjee also sees potential for other Google services – including YouTube, Drive and Google Hangouts – that haven’t fared as well in Asian markets. Like mobile penetration, he believes the success of these platforms in Asia will be somewhat reliant on the success of Android and developing Internet penetration in markets like India and China.
Motoko Hunt, president and search marketing consultant for Japanese SEO company AJPR, doesn’t believe the reorganization will have any effect on the search and advertising sectors in Asia – or anywhere else for that matter – unless service models are changed. However, she does think the move could make it easier to bring other Alphabet services and products – such as robotics, Nest, and autonomous vehicles – to China, now that they are detached from the search department. Google and its properties have been blocked in China for some time now.
“It’s a smart move for Google, as it will allow each department to grow independently,” Hunt says, adding that the restructuring also gives more financial flexibility. “This is good news to Google’s search department, as they are the biggest money generator.”
Lee Smith, president, Annalect APAC, Omnicom Media Group, says Google products have always been global with a consistency in products. From a marketing perspective, however, he does believe the new Alphabet structure will give more autonomy to the product teams, in turn, allowing them to make more independent decisions on the directions for new product integration.
“I’m not sure that the launch of Alphabet will act as a catalyst for products in Asia, but it will certainly give more autonomy to the products on a global basis, as each product lead manages a more autonomous product roadmap,” Smith says. “You can imagine Australia will benefit most directly, given its similarities to the U.S. and other developed markets.”
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