Google races to parry the rise of Facebook in India

Google CEO Sundar Pichai mapped out a new strategy for India. (Reuters)
Updated 05 September 2018
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Google races to parry the rise of Facebook in India

  • Facebook’s success has shaken Alphabet Inc’s Google, led by an Indian-born CEO, Sundar Pichai, who has made developing markets a priority
  • Google officials in India earlier this year were alarmed to learn that Facebook Inc. was likely to generate about $980 million in revenue in the country in 2018

DUBAI: Google retains only a slight lead over Facebook in the competition for digital ad dollars in the crucial India market, sources familiar with the figures say, even though the search giant has been in the country far longer and has avoided the controversies that have dogged its rival.
Facebook’s success has shaken Alphabet Inc’s Google, led by an Indian-born CEO, Sundar Pichai, who has made developing markets a priority.
Google officials in India earlier this year were alarmed to learn that Facebook Inc. was likely to generate about $980 million in revenue in the country in 2018, according to one of the sources. Google’s India revenues reached $1 billion only last year.
Google is now pushing back, attempting to lure customers with better ad-buying tools and more localized services.
The battle in India reflects an epic challenge for Google in developing markets around the world that are crucial to the company’s long-term growth — many consumers in those country’s are gravitating to Facebook and its siblings, Instagram and WhatsApp, at the expense of Google search and YouTube, and advertising dollars are quick to follow.
“Facebook is a far more user-friendly platform, even though they haven’t created features specifically for Indian advertisers,” said Vikas Chawla, who runs a small ad-buying agency in India.
Facebook ads, compared with those on Google search or YouTube, tend to transcend language barriers more easily because they rely more on visual elements, said Narayan Murthy Ivaturi, vice president at FreakOut, a Singapore-headquartered digital marketing firm. Pinpointing younger consumers and rural populations is easier with Facebook and its Instagram app, he and other ad buyers said.
And Facebook is succeeding in India, which has the fastest-growing digital ad market of any major economy, despite internal turmoil and political controversy. It has been without a country head for the last year, and has faced a series of incidents in which rumors circulating on Facebook and WhatsApp have prompted mob violence.
Facebook and Google between them took 68 percent of India’s digital ad market last year, according to advertising buyer Magna. Media agency GroupM estimates digital advertising spending will grow 30 percent in India this year.
Eight Indian ad buyers interviewed by Reuters were divided on whether Facebook would overtake Google in Indian ad revenue. That such a question would even be debated explains why Pichai, Google’s CEO, has pressed to flip the company’s approach to emerging markets.
“India is the most important market for the ‘Next Billion Users’ initiative,” Caesar Sengupta, the head of the effort, told Reuters last week.
For many years Google designed its services for early adopters of new technology, who tended to be in Silicon Valley, said Nelson Mattos, who oversaw Google’s Europe and Africa operations for several years.
“Over time, as you saw the growth of Facebook, the importance of WhatsApp and other tools in these new markets, and not the same adoption of Google, the company started to realize that maybe they had to change that approach,” Mattos said.
Shortly after taking the helm three years ago, Pichai mapped a new strategy for places such as India: More services tailored to locals; more marketing on radio, billboards and TV; more local staff and start-up investment.
Google’s India workforce has more than doubled since to 4,000 employees, about eight times Facebook’s presence, according to a tally of LinkedIn profiles. Its products evolved too, becoming easier to use with low- data plans.
The efforts are bearing fruit. Indian users during the first half of this year spent more time on Google services than on Facebook services, according to estimates from audience measurement firm Comscore.


US in criminal probe of China's Huawei

Updated 17 January 2019
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US in criminal probe of China's Huawei

  • The Wall Street Journal said the US justice department is looking into allegations of theft of trade secrets from Huawei's US business partners
  • Huawei forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government

WASHINGTON: US authorities are in the "advanced" stages of a criminal probe that could result in an indictment of Chinese technology giant Huawei, a report said Wednesday.
The Wall Street Journal, citing anonymous sources, said the Department of Justice is looking into allegations of theft of trade secrets from Huawei's US business partners, including a T-Mobile robotic device used to test smartphones.
Huawei and the Department of Justice declined to comment on the media report.
However, Huawei noted that "Huawei and T-Mobile settled their disputes in 2017 following a US jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile's trade secret claim."
The move would further escalate tensions between the US and China after the arrest last year in Canada of Huawei's chief financial officer Meng Wanzhou, who is the daughter of the company founder.
The case of Meng, under house arrest awaiting proceedings, has inflamed US-China and Canada-China relations.
Two Canadians have been detained in China since Meng's arrest and a third has been sentenced to death on drug trafficking charges -- moves observers see as attempts by Beijing to pressure Ottawa over her case.
Huawei, the second-largest global smartphone maker and biggest producer of telecommunications equipment, has for years been under scrutiny in the US over purported links to the Chinese government.
Huawei's reclusive founder Ren Zhengfei, in a rare media interview Tuesday, forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government.
The tensions come amid a backdrop of President Donald Trump's efforts to get more manufacturing on US soil and slap hefty tariffs on Chinese goods for what he claims are unfair trade practices by Beijing.
In a related move, lawmakers introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws -- with Huawei and fellow Chinese firm ZTE the likely targets.
"Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army," said Republican Senator Tom Cotton, one of the bill's sponsors.
Democratic Senator Chris Van Hollen said in the same statement: "Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated US laws, represent a significant risk to American national security interests and need to be held accountable."
Last year, Trump reached a deal with ZTE that eases tough financial penalties on the firm for helping Iran and North Korea evade American sanctions.
Trump said his decision in May to spare ZTE came following an appeal by Chinese President Xi Jinping to help save Chinese jobs.