GOOGLE

The Africa Report - - CONTENTS - By Mark An­der­son in Ka­ji­ado and Johannesburg

The next bil­lion The Amer­i­can tech gi­ant is us­ing train­ing pro­grammes to reel in new African in­ter­nauts

Google knows the power of round num­bers: as the Amer­i­can tech pi­o­neer marks 10 years in Africa it also hit 1 mil­lion par­tic­i­pants in its Dig­i­tal Skills for Africa pro­gramme. The Africa Re­port ex­am­ines why train­ing is a key strat­egy for reel­ing in new con­ti­nen­tal in­ter­nauts

Out­side a com­mu­nity cen­tre just south of Nairobi, groups of young Kenyans gather around speakers blast­ing Bongo music as they chat and check their phones. About 120 un­em­ployed twenty-some­things, many of them univer­sity grad­u­ates, are wait­ing to be­gin a train­ing ses­sion spon­sored by Google. “We’re teach­ing them how to use Google prod­ucts and how to build their on­line pres­ence,” says Ted Odera, 25, a dig­i­tal skills trainer. “Some of the stu­dents want to build a brand, oth­ers want to get a job,” he says. Odera es­ti­mates that he has trained about 8,000 stu­dents in the past year. John Mwangi, 24, an un­em­ployed graduate from Kis­e­rian, a town 30km from Nairobi, says he re­ceived a text mes­sage urg­ing him to go to the train­ing be­cause he could earn up to $200 a day do­ing on­line jobs. “In Kenya, the in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy (ICT) sec­tor is grow­ing,” he says. “I want to get a job.” Google’ s par­ent com­pany Al­pha­bet, which raked in $90.3bn in rev­enue last year, spon­sored this train­ing ses­sion as part of its strat­egy to ex­pand the com­pany’s pres­ence on the con­ti­nent. It has set an am­bi­tious tar­get to at­tract one bil­lion new in­ter­net users by 2020, and the race is on to hook new in­ter­nauts on Google’s ser­vices, which in­clude email, mes­sag­ing and web searches. Sub-sa­ha­ran Africa is one of the re­gions most ripe for at­tract­ing new users. Google es­ti­mates

there will be 500 mil­lion in­ter­net users in Africa by 2020. The race is on to cap­ture as many of these new users as pos­si­ble. Dig­i­tal train­ing pro­grammes, a cru­cial part of Google’s strat­egy, help to fix the con­ti­nent’s “ba­sic dig­i­tal lit­er­acy prob­lem”, ac­cord­ing to Luke Mck­end, Google’s coun­try di­rec­tor for South Africa. The vast ma­jor­ity of African in­ter­net users are us­ing smart­phones, mean­ing they may not be get­ting as much from the in­ter­net as they could be.

BUILD­ING AN ECOSYS­TEM

The com­pany’s push to en­ter emerg­ing mar­kets re­flects in­creas­ing com­pe­ti­tion with other tech gi­ants, such as Face­book (see TAR85, Nov. 2016). Face­book has part­nered with hard­ware man­u­fac­tur­ers Eric­s­son, Nokia, Sam­sung and Me­di­atek and soft­ware com­pany Opera to roll out its pro­gramme, In­ter­net.org, which al­lows users in devel­op­ing coun­tries to ac­cess a hand­ful of web­sites from their phones at no data charge, via the Free Ba­sics app. So far the pro­gramme has at­tracted 40 mil­lion users. Google says it is not worried. “We be­lieve that a stronger in­ter­net with more play­ers is good for us. It’s good for growth in jobs in Africa, and a strong ecosys­tem is good for Google’s busi­ness,” says Caro­line Atkinson, Google’s head of global pol­icy. “Our strat­egy to make money in Africa is the same as our strat­egy any­where.” Google has dom­i­nated the web­search busi­ness in many parts of the world. The com­pany’s Gmail ser­vice has more than 1 bil­lion ac­tive monthly users. In the US, more than 34bn Google searches are car­ried out across all plat­forms ev­ery month, ac­cord­ing to fig­ures from the com­pany. But growth is start­ing to plateau. As Google so­lid­i­fies its pres­ence in es­tab­lished mar­kets, it is look­ing for new op­por­tu­ni­ties else­where. While Google is es­ti­mated to con­trol about 75% of the US mar­ket for web searches, it con­trols just 10% in China, where com­peti­tor Baidu is pop­u­lar. An­a­lysts agree that the time has come for Google to look to emerg­ing mar­kets. “Given how high in­ter­net pen­e­tra­tion and avail­abil­ity are now in ma­ture mar­kets, Google’s main fo­cus, ob­vi­ously, has to be emerg­ing mar­kets,” says Jan Daw­son, chief an­a­lyst at Jack­daw Re­search. “For both Google and Face­book, the pri­or­ity at this point is say­ing: ‘Well how can we get more peo­ple on­line and what’s the best way to do that? And ide­ally, what’s the best way to do it in such a way that those peo­ple end up us­ing our ser­vices as well at the end of the day?” Google’s strat­egy to at­tract new African users is cen­tred around train­ing young peo­ple, build­ing new in­fra­struc­ture and tr ying to lower the cost of en­try-level smart­phones. With hubs in Kenya, Nige­ria and South Africa, Google is in the process of train­ing 1 mil­lion young peo­ple to use its prod­ucts.

It will also lay thou­sands of kilo­me­tres of fi­bre-op­tic cable and form part­ner­ships with tele­coms com­pa­nies to help drive down the cost of en­try-level smart­phones, Google ex­ec­u­tives say. Mck­end un­der­scores the im­por­tance of ad­ver­tis­ing in the com­pany’s strat­egy on the con­ti­nent : “Our big­gest source of rev­enue is largely ad­ver­tis­ing,” he says. “If you run a search for car in­sur­ance in South Africa, we will try and as­sess your in­tent by look­ing at the ac­tual term that you used. If you are a logged-in user we might look at the searches that you’ve con­ducted pre­vi­ously and we will use all of those sig­nals to de­liver an ap­pro­pri­ate re­sult, whether it’s an ad or whether it’s an or­ganic re­sult [a non-paid-for re­sult that ap­pears be­cause of its rel­e­vance to search terms]. That’s ex­actly the same way that Google works every­where else in the world.”

MO­BILE FIRST

The com­pany sees huge op­por­tu­ni­ties to ride the waves made by Africa’s mo­bile rev­o­lu­tion. “If you look at our next bil­lion user ini­tia­tive, which is largely fo­cused on Asia and In­dia, I think one of the most in­ter­est­ing things for us to think about is how we’re go­ing to ad­dress an en­tirely new swathe of users who are mo­bile first […] and how do we ad­dress the use case [how sys­tems con­nect ac­tor to goal] for that kind of user in emerg­ing mar­kets,” says Mck­end. “And those emerg­ing mar­kets are largely Africa, Asia, In­dia, to some ex­tent Brazil, some South Amer­ica,” he adds. An es­ti­mated 90% of Africa’s in­ter­net users are on mo­bile, ac­cord­ing to Google. But just 12% of Africans have ac­cess to a smart­phone, com­pared to 57% of Amer­i­cans, ac­cord­ing to the com­pany. That makes driv­ing down the cost of smart­phones cru­cial to the com­pany’s strat­egy to grow the num­ber of users on the con­ti­nent. Google’s re­cent bat­tles with tax author­i­ties in Europe will be cause for concern for many African gov­ern­ments. In the UK, politi­cians have called for the com­pany to pay its “fair share” of cor­po­rate tax af­ter it was sharply crit­i­cised for pay­ing just $47m in taxes on sales of $7.7bn. A Google spokesman said: “As an in­ter­na­tional busi­ness, we pay the ma­jor­ity of our taxes in our home coun­try, as well as all the taxes due in the UK.” An­a­lysts say gov­ern­ments in emerg­ing mar­kets will be watch­ing this saga closely. “African coun­tries are start­ing to scru­ti­nise the fi­nan­cial op­er­a­tions of ma­jor play­ers with much greater in­ten­sity, par­tic­u­larly in tele­com and con­nec­tiv­ity sec­tors,” says re­search an­a­lyst Jon Tul­lett. “I haven’t seen any ac­tion di­rected against Google yet, but the com­pany is cer­tainly watch­ing the move­ments of reg­u­la­tory bod­ies very closely.”

TRAD­ING PRI­VACY FOR JOBS

An­other stick­ing point for many is the is­sue of on­line pri­vacy. Google in­sists that user data is anonymised and kept safe from pry­ing eyes, but a se­ries of re­cent high-pro­file data breaches have thrown on­line se­cu­rity and pri­vacy into the spot­light. “Pri­vacy is ob­vi­ously a huge is­sue with any ad-based busi­ness, […] the idea that Google is keep­ing track of all your ac­tiv­i­ties across its dif­fer­ent ser­vices and build­ing a pro­file on you which is then used to sell you ad­ver­tis­ing,” says Daw­son, the an­a­lyst. “There’s ob­vi­ously a lot of concern about that in cer­tain quar­ters – at least cer­tainly in Europe, [where] they tend to be more con­cerned about pri­vacy things than here in the US.” But gov­ern­ments also want ICT sec­tor jobs, and some are team­ing up with Google to carry out train­ing pro­grammes. “We are part­ner­ing with Google in cre­at­ing aware­ness about on­line jobs,” says Haron Ker­tich, an ICT of­fi­cer at Kenya’s min­istry of pub­lic ser­vice, youth and gen­der af­fairs. The govern­ment is try­ing to boost the num­ber of work­ers in the on­line sec­tor to 1 mil­lion, up from its cur­rent level of 40,000. Back out­side the com­mu­nity cen­tre in Ka­ji­ado, Mwangi, the stu­dent, says he ap­pre­ci­ates the train­ing that Google has given him. But he sees through their strat­egy. “For them, it’s busi­ness,” he says. “It’s all about hav­ing more users.”

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