Google gears up for 'next billion' of Internet users

By Vladimir Bunoan,

Posted at Dec 05 2012 06:48 PM | Updated as of Dec 06 2012 02:49 AM

Google gears up for 'next billion' of Internet users 1Google executives chat after their presentation on "The Next Billion" at the tech giant's office in Singapore on December 3. Photo by Vladimir Bunoan for

SINGAPORE – Tech giant Google is gearing up for “the next billion” who are expected to come online between now and 2015.

Google is expecting 500 million new Internet users in that time period from emerging markets such as the Philippines, compared to only 15 million new users in the United States.

At a briefing at its Singapore office on Monday, Google executives said “the next billion” of new netizens will usher in a redefinition of the Internet, particularly with the rapid take up of mobile phones.

“(The Internet) used to be defined by developed countries. Now it’s being defined by developing countries,” said Julian Persaud, managing director for Google Southeast Asia.

“The web used to be about the desktop but now it’s really mobile phones,” he added, citing the experience in India, where mobile traffic has overtaken desktop traffic. “And this is an indicator of the shape of things to come.”

Persaud noted that in just a little over a decade, the Internet has exploded from an estimated 364 million users in 2000 to 2.2 billion last year, citing data from the World Bank.

He also pointed out that 474 million of people who are now online come from emerging markets – which doesn’t even include China and Russia – representing only a scant 14% of the 3.3 billion people in this potent market, which make up almost half, or 47%, of the world population.

As more people from these new markets become connected to the Internet, there will also be a shift away from English, since 73% of those in emerging markets don’t have English as their first language.

“So if you think about the center of gravity and how it is changing, it’s moving away from the west, away from the northern hemisphere, and away from English. These are very big changes,” Persaud said.

“If you look at the five biggest markets with people who are not online, those five are all in Asia, and the biggest one is India,” he pointed out.

According to data from the World Bank, India has an Internet penetration of only 10% or around 125 million Internet users in 2011, while Indonesia has 43.6 million users or 18% of its total population.

The Philippines has 27.5 million Internet users or 29% of its population, while Thailand has a lower penetration of only 23.7% or around 16.4 million users.

“If you think about what mobile devices are doing in this region, it’s creating this leapfrog moment in the Internet. Many people in this region are not gonna own a desktop, not gonna own a PC,” Persaud said.

He also cautioned those who merely see “a Pakistan or the Philippines (as) just 10 years behind, 15 years behind the US or the UK.”

“They are building from a completely new base, an often mobile base, and we’re very much entering a brave new world and a new backbone for Internet growth around the world,” he said of the emerging markets.

Business opportunities

For Google, the “next billion” will mark a new wave of opportunity for businesses, especially in Southeast Asia.

“Particularly for small businesses, the web becomes a real enabler,” Persaud said, noting that in developed world, the Internet economy contributes 3.4% of gross domestic product, compared to 1.9% in emerging markets.

“So there’s still some ways to go and a lot of potential,” he said.

“As we have seen in the Western world, the Internet has the power to change in a very, very positive way the lives of a lot of people and actually the means for the success of a lot of businesses. The potential of this in the emerging market is just incredible. We are already starting to see that growth happening quite rapidly particularly in Asia, and particularly in South and Southeast Asia,” added Nelson Mattos, Google’s vice president of product and engineering for Europe and emerging markets.

Mattos, who hails from Brazil, cited his experience travelling around emerging markets around the world. For instance, he noted that small farmers from Africa and India were able to increase their incomes by 30% just by using Google search to access the agriculture price in the big cities.

“That simple information puts them in a much better position to negotiate with the middle men and actually increase their income by 30%,” he said.

He also noted that jobseekers can, via the Internet, connect directly to employers and thus save on paying commissions to recruitment agencies of up to 50% of their potential income.

Google gears up for 'next billion' of Internet users 2Nelson Mattos, Google’s vice president of product and engineering for Europe and emerging markets, makes his presentation at the tech giant's office in Singapore on December 3. Photo by Vladimir Bunoan for

“In my opinion, poverty to a large extent is an information problem. Lack of information actually can block improvements to raise income, block people from getting better healthcare, keep them away from education,” he added.

Mattos, however, cautioned that the speed of growth is still not as fast as it should be.

“A lot of the people are still offline, a lot of the businesses are still offline. Only 14% of those in the emerging market are currently taking advantage of the Internet,” he said.

Barriers to Internet growth

For Mattos, there are three basic challenges as to why many people in emerging markets are not taking advantage of the Internet.

“The simple fact is that data transmission is quite expensive in these parts of the globe,” he said, noting that Internet access is at least 10 times more expensive than in the US and Europe.

Moreover, networks are “very over-loaded” and “super-congested” in the developing world, such that, for instance, the government of Brazil recently prohibited several operators from recruiting new users until they upgrade their network, he said.

The second major problem, he said, is that the content offered on the Internet is not relevant to many people in these markets.

“They come online and they see an Internet full of content but this content was created mostly thousands of miles away and in many times in languages that they don’t understand. In addition to that, a lot of the products and services are created for devices that they don’t have or require the use of protocols that are not the ones they use on a regular basis,” Mattos said.

The Google executive also noted that emerging markets have small “sustainable communities” of IT professionals such as developers and Internet business entrepreneurs that can further develop web services in these markets.

“If we lower these barriers, the growth of the Internet will explode,” he said.

Google’s response

And this is where Google comes in.

“What we’re actually doing is looking at the long term and trying to answer the question of how Google can help make the Internet as a whole much, much bigger in these countries,” Mattos said.

For instance, to address the slow Internet connections, Google introduced its Chrome browser, which, he noted, has become popular among small Internet cafes in the Philippines.

“Time is money in these markets and if you have a slow browser you are paying for sitting in front of your screen waiting for your web page to load. So no surprise that the Philippines is the first large country where Chrome became the predominant browser,” he said.

Mattos also noted that many websites in the Philippines are hosted in overseas servers, such that requests will have to go through submarine cables all the way across the Pacific Ocean to California and back.

“Obviously that’s very unnecessary and extremely expensive. So Google is doing a lot of investment in helping and providing advice to the creation of robust Internet exchange points in these countries so local traffic can be served and remain local within the country,” he said, pointing to such benefits as reduced operational costs for businesses and an improve end-user experience.

Mattos also noted that while 70% of mobile phones in emerging markets are Internet-enabled, only a fraction of those in these countries are online.

“And the main reason for that is that they don’t have data plans or they can’t afford to pay for a data plan,” he said.

Last month, Google launched a new product dubbed Free Zone in the Philippines and South Africa that allows users to access any website they can find on Google search for free, as well as Gmail and its social networking service Google+.

“Obviously we hope that as people start using the Internet they will learn of its value, they will see the potential that it brings to them and then they will sign up for a data plan,” Mattos said.

Noting the popularity of SMS in countries like the Philippines, Google has also extended text services for Gmail and Google+ on feature phones, wherein users get an SMS if they get an email. They can also reply to that email via SMS.

Getting business online

To boost relevant content on the Internet, Google has identified crowdsourcing as an effective way to get local content online fast, citing its experience with Google Map Maker, which relies on “citizen cartographers” and is now being used in crisis relief efforts.

Moreover, Google is encouraging small and medium businesses to get on the web and thus provide more local information for users. Mattos noted that only 2% of small businesses in emerging markets have an online presence.

One simple way for entrepreneurs to create an online presence is to get on Google Maps, where they can also include their business phone numbers. “But what is most important, the moment you are in Google Maps, you are automatically searchable,” Mattos said.

Businessmen can also create pages for their companies on Google+ that will provide them with the means to better interact with customers.

Google has also piloted a new product called Google Trader in Thailand that allows small businesses to post their products and services online. And for those looking to create a full website, the tech giant has launched a program called Get Your Business Online.

And since many of these business owners are not tech-savvy enough, Google, at least for the Google Trader project, “sends experts on the streets to hand-hold people in teaching them on how to come online.” Hopefully these will become models for their fellow entrepreneurs and help others.

To address the low number of IT professionals in many of these developing markets, Google has several programs “to help create these communities, enlarge them and deepen their knowledge” by partnering with universities and training people. It also has a “web academy” that teaches people the basics of the Internet to developing tools taught by official institutions in countries such as Malaysia and India.

“If we get this right, the growth of the Internet will be a lot more sustainable and a lot more balanced. Instead of seeing the growth of the Internet driven by just a few conglomerates, we’re going to see the Internet growing because of very many small businesses coming online,” Mattos said.

“It should better reflect the local culture. It should better reflect the local needs and make the Internet more valuable and obviously the local economy a lot stronger.”