THE ABCs OF ALPHABET'S INTERNATIONAL BUSINESS: (B) is for BILLIONS

"We want to build products for everyone." - Sundar Pichai, Google CEO

*Image courtesy of Google I/0 2017 - Building for Your Next Billion Users

*Image courtesy of Google I/0 2017 - Building for Your Next Billion Users

At last year's Google I/O conference,  Google's CEO Sundar Pichai started his speech by stating that, “We have been focused ever more on our core mission of organizing the world’s information.  And we are doing it for everyone.  And we approach it by applying computer science and technical insights to solve problems at scale.”[1]  As of 2017, Google’s seven core products[2] have reached over one billion active users.  About three billion people have access to the Internet in some form, and the world’s population has grown to over seven billion people.  Sundar’s speech was live-streamed to 7,000 people at 400 events in 85 countries with varying levels of Internet accessibility and technological adoption, including densely populated countries in the Asia Pacific region (APAC) like Bangladesh, India, Indonesia, the Philippines, and Vietnam.  

Citizens in these major emerging markets often access the Internet for the first time on a wide range of devices, usually secondhand, where the connections are poor, and data storage is expensive.  For example, in India, about a third of smartphone users run out of storage space every day, half of these users are only on 2G connections, and it costs the equivalent of $2 to download a single “free” 40MB app.[3]  In contrast, established Internet users have modern smartphones with plenty of storage, are completely online all of the time on fast 4G connections, and can download free apps at no cost.  If Google wants to organize the world’s information for everyone, how can it create products and services to serve the entire planet with such a disparity in devices and infrastructure?

To answer this question, and to start the next chapter of its global operations, Google created a comprehensive emerging market entry strategy to capture potential users worldwide called The Next Billion Users Initiative led by Google’s Vice President of Product Management, Caesar Sengupta.  Caesar’s team is spread across Mountain View, India, Singapore, and Sydney.  “The term next billion has generally existed in the industry for a while.  We started this effort formally within the company.  The reason for that was if you look at where we are in computing history, we’re at a point of very interesting transition, where users are moving from desktops to laptops to smartphones.”[4]  Google’s approach to product development is to put the user first and then work backwards.  Therefore, the first step in this initiative was to learn more about these next billion users.  According to Google’s market research, these new users may be from different countries, but they all share similar characteristics.[5]

-Regional: most of these new users are located in APAC.  It is no coincidence that Caesar is based in Singapore, which is a six-hour flight to most of the world’s population in China, India, Indonesia, and the rest of Southeast Asia.  “It’s all about location, location, location,” said Caesar

-Mobile: for these next billion users, the first device they will start using is a smartphone, as opposed to a desktop or laptop.  Therefore, the way that these users think of products and services will be very different.  “We have to adapt our thinking as product builders, as engineers, to build the right services and tailor it for them,” explained Caesar.

-Demographics: most of these users very young, largely under 25, urbanizing, and are informed consumers.  According to Caesar, these users may be new to computing, but they are very savvy about the choices they are make and the products they buy.

-Uniqueness: while these next billion users share common themes, they are also very different from each other.  Google is still aware of the local dimensions within the next billion users.  “The reality is that a user in Vietnam is different from a user in Indonesia or Malaysia, and you have to understand the local differences and the nuances very well - - the cultural differences, the choice differences,” said Caesar.

Now that Google defined who these next billion users would be, the next step was to figure out how to adapt Google’s products and services.  “I think we have to figure out how to change the experience in a way where it’s not dumbing down the experience.  I hate the whole concept of this product is for us, something dumb is for you guys.  Having grown up in India that used to always bother me when people said this is for the West, and this is for India.  We think this has to be a customized experience for these users and using the unique characteristics of what they’re doing and how they’re doing it,” explained Caesar.[6]  Therefore, Google has customized its products and services for its next billion users based on the following five principles.  What Google didn’t expect was that these principles would lead to technical insights that would enhance their products and services for every user.

REMOVE BARRIERS: DATALLY IN THE PHILIPPINES

In a presentation for Google Chrome Developers at Google I/O 2017, Google Developer Programs Engineer Mariya Moeva explained, “Before people even start interacting with your product, you need to remove the barriers from them to do so.  The high cost of data, poor connectivity and low-quality devices stand between you and these users even before they start using your product.”[7]  Mariya underscored the importance of streamlined apps that don’t necessarily require installation from an apps store, a lot of memory, or constant connectivity.  For example, Google recently had success in the Philippines with a new app called Datally, which helps users monitor the data consumption on their mobile devices.  Datally shows which apps are using data the most data and at what times, recommends ways to cut down on data usage, and suggests nearby Wi-Fi networks.  During the pilot phase, Datally grew to half a million users in the Philippines who saved an average of 30% of their data because Google removed the barrier of data uncertainty.[8]  In November 2017, Google released Datally to the rest of the world on any phone running Android 5.0 or higher, which means that a product specifically designed for the next billion users has become a product for all users.

OPTIMIZE SPEED: TRANSCODED PAGES

The second principle that Google learned that was in order to succeed in these markets, they would have to optimize for speed.  “I have yet to hear anybody, anywhere on the planet complaining that something is loading too fast,” said Mariya.   However, in developing countries, most users rely on free Wi-Fi or low-speed 2G and scarce 3G coverage.  For example, half of users in India are on 2G connections.  To help overcome this, Google launched transcoded pages across its core products.  Transcoded pages convert web pages into a version optimized for slow networks so that these pages load faster while saving data.[9]  These optimized pages only preserve the most important parts of a web page and provide a link for users to view the original page.  Transcoded pages load four times faster than the original pages using 80% fewer bytes.  Google saw a 50% increase in traffic to these transcoded pages because users perceive that everything is loading faster, so they browse more.[10] 

ADDRESS INTERMITTENT CONNECTIVITY: YOUTUBE GO & YOUTUBE SMART OFFLINE

For the next billion users, Google learned that offline is a state in itself.  Mariya emphasized to Google Developers that, “We need to make sure our stuff functions even when people are going in and out of connectivity.  Not everybody has Wi-Fi.  A lot of people go to store or train stations in order to get access to Wifi.  They download a lot of stuff there and then they spend most of their time offline the rest of the day.”  Google has had success in overcoming intermittent connectivity in India with two products – Youtube Go and Youtube Smart Offline.  YouTube Go allows Indian users to save videos for offline viewing, giving options over quality and file size, so it’s clear how much data a download will require.  According to Youtube Product Management Vice President Johanna Wright, “YouTube Go was designed and built from the ground up with insights from India, in order to bring the power of video to mobile users in a way that is more conscious of their data and connectivity, while still being locally relevant and social.[11]  Youtube Smart Offline gives Indian users the option of downloading videos overnight when data is cheaper.  When the user wakes up the next morning, their videos are ready to be watched offline, and on the go, with no buffering for up to 48 hours.  Youtube Smart Offline is currently available on four Indian mobile operators: Aircel, Airtel, My Vodacom, and Telenor.[12]  These products have lowered the barriers to entry for Google’s operations and contributed to Google’s reputation as the most authentic brand in India.[13]

MULTILINGUAL: GOOGLE TRANSLATE WITHIN SEARCH

The next billion users speak a wide array of languages like Bengali, Hindi, Portuguese, Tagalog, and Vietnamese.  According to Caesar, “Many of the next billion users are not going to be as familiar with English, so it’s really important for us to be able to bring content to them in their languages.”  However, Google learned that in a lot of these new markets, people use more than one language throughout their day.  “They might do their homework in English, they might talk to their Grandma in one dialect, and they might use a completely differently language in school,” described Mariya.  Google has incorporated Google Translate into its next billion user strategy by allowing users to switch back and forth between multiple languages while using Google Search.  For example, for mobile search results in Hindi-speaking areas of India, Google gave users the ability to switch between English and Hindi which led to a 50% increase in Hindi searches on mobile phones.[14]

GUIDE NEW USERS: USEABLE, USEFUL, AND ENGAGING

Finally, Google is focusing on how to make their products useable, useful, and engaging for these first-time users.  Unlike established users who have owned desktops, laptops, and tablets; the next billion users will experience the Internet for the very first-time through their phones.  Therefore, companies like Google have to gently guide new users on how a product works and why they should incorporate it into their daily lives.  “The important thing for us is that we have to build our products and services for these users.  Otherwise, they’ll use a product or an app that works for them on that phone,” said Caesar.  “A lot of them have never used email, and they have different cultural expectations or color preferences,” explained Mariya.  For example, while established Internet users prefer the standard minimalist appearance of Google Chrome Default Page, new users in emerging markets told Google that they found it to be cold and unwelcoming.  Google is experimenting with a revised Google Chrome Default Page for these new users that features links to their favorite websites based on their search histories.[15]  This iterative process is all about giving new users a reason to keep using the Internet.  According to Jana Levene, who previously worked in Google’s business development in emerging markets, “It’s not just about whether users have access to the Internet, it’s also are they doing things on the Internet?  Are they engaged?”[16]

TECHNOLOGY AS AN EQUALIZING FORCE

Google’s Next Billion Users Initiative has merged international business strategy, computer science, technical insights, and corporate social responsibility into one comprehensive approach to emerging markets.  In an interview with TechCrunch, Jen Fitzpatrick, Google’s Vice President of Engineering and Product Management described that, “Google is all about making the world’s information universally accessible and useful.  If you are talking about making it universally accessible, that means literally universally accessible to all the people in the world.  We’re still at the very early stages of mobile computing as a platform and getting as much of the world as possible involved in inventing and helping to drive what the future looks like is a good thing I think for Google but for the world too.”[17]  According to Alphabet Inc.’s most recent quarterly report to investors, Google’s parent company earns most of its revenue outside of the Asia Pacific region (APAC).  If Google is going to continue to grow and truly accomplish its core mission, the next step is to earn the business of new users in APAC.  

*Alphabet Inc.'s Q3 2017 Filing with the U.S. Securities & Exchange Commission for the quarterly period ended September 30, 2017, page 11, available at: https://abc.xyz/investor/

*Alphabet Inc.'s Q3 2017 Filing with the U.S. Securities & Exchange Commission for the quarterly period ended September 30, 2017, page 11, available at: https://abc.xyz/investor/

As the next billion users begin to incorporate the Internet into their daily lives, they will encourage another billion users, and so on.  This compounding force has the potential to gradually ameliorate problems around the world that could never be addressed without the power of the Internet.  A recent U.S. government study proposed that “Many new technologies hold great potential for addressing the complex challenges the world faces, but their impact will be blunted if available to only a few countries or elite segments of populations.  Increased global connectivity makes populations more aware of new technologies and more eager to access them.”[18]  Just imagine if everyone around the world had access to an engaging, reliable, Internet experience and they were left to their own devices.  It will be up to Google’s next billion users to decide how they will utilize, scrutinize, and assimilate all of this new information at their fingertips.  Sundar Pichai said that “The thing that attracted me to Google, and to the Internet in general, is that it’s a great equalizer.  To me, I have always been struck by the fact that Google search worked the same, as long as you had access to a computer with connectivity, if you were a rural kid anywhere or if you were a professor at Stanford or Harvard.  I want to strive to push Google to do that.  Not just build technology for certain segments, for me, it matters that we drive technology as an equalizing force, as an enabler to everyone around the world.”[19]  To learn more about Google’s Next Billion Users Initiative visit Google’s Building for Billions Website.

NOTES

[1]  Google I/O Keynote (Google I/O '17) streamed live on May 17, 2017, available at: www.youtube.com/watch?v=Y2VF8tmLFHw

[2] Android, Google Chrome, Google Maps, Google Play, Google Search, Gmail, and Youtube.

[3] Building for Your Next Billion Users (Google I/O '17), dated May 19, 2017, available at: www.youtube.com/watch?v=wD3rpdiLMyY&t=388s ("Building for Your Next Billion Users Google I/O 2017")

[4] TECHie: Google’s Plans for the Next Billion Internet Users, dated September 29, 2016, available at: www.youtube.com/watch?v=r5lhdOdzLfI&feature=youtu.be (TECHie Google's Plans for the Next Billion Users)

[5] Tech in Asia: The Next Billion Users for Google, dated May 12, 2016, available at: www.youtube.com/watch?v=MxyHGvmSWvg&feature=youtu.be

[6] TECHie Google's Plans for the Next Billion Users

[7] Building for Your Next Billion Users Google I/O 2017

[8] The Verge: Google’s new Android app stops other apps from wasting your data, by Jacob Kastrenakes, dated November 29, 2017, available:  www.theverge.com/2017/11/29/16716796/datally-data-tracking-android-app-google

[9] If the original page is not mobile-friendly, Google converts the content into a mobile-friendly format.  Google also reduces the page size so that the page loads faster than the original.  Google does this by removing unnecessary JavaScript and CSS, compressing images, and doing other performance optimizations.  After the content has been optimized, Google places the publisher’s ads back into the transcoded page.

[10] Google Support: Ad network support for transcoded pages in Google Search, available at: https://support.google.com/webmasters/answer/6211355?hl=en

[11]  The Verge: YouTube Go is a new app for offline viewing and sharing, by Sam Byford, dated September 27, 2016, available at:  www.theverge.com/2016/9/27/13070804/youtube-go-announced-india-offline

[12]  Youtube Smart Offline, available at: www.youtube.com/yt/smartoffline/

[13]  The Economic Times: Google most authentic brand in India, dated October 19, 2017, available at: https://tech.economictimes.indiatimes.com/news/internet/google-most-authentic-brand-in-india-report/61146543

[14] Building for Your Next Billion Users Google I/O 2017

[15] Id.

[16]  TEDx Talks: Bringing the next billion users online: Jana Levene at TEDxDhaka, dated January 5, 2014, available at: www.youtube.com/watch?v=3sP2g7_e3JY&t=58s

[17]  TechCrunch: Google’s Quest to Bring The Internet To The Next Billion People, dated May 28, 2015, available at: www.youtube.com/watch?v=tIbonIMDfiw

[18]  Global Trends 2035 The Paradox of Progress: A Publication of the National Intelligence Council, January 2017, available at: www.dni.gov/index.php/global-trends-home

[19]  The Verge: The future of Google with Sundar Pichai, dated May 29, 2015, available at: www.youtube.com/watch?v=TguamcqrQjI