Alphabet (GOOGL) and Facebook (FB) Scramble to Claim India

At this point, it’s an open secret in the tech world: If you’re a sprawling Internet company the size of Facebook (FB) or Alphabet‘s (GOOG, GOOGL) Google, there’s only one immediate route to take for rapid user growth.

new-google-googl-stock-logo-185And that route goes right through India.

India, a country of 1.2 billion people, is home to roughly one-sixth of the global population. And five-sixths of India’s population is actually offline today — an estimated 1 billion people.

GOOG and FB are wasting no time trying to get those people online, where they can get get them to use their respective services. You can tell it’s a huge priority for GOOG, and FB in particular, simply by looking at the flight plans of each company’s respective CEO.

Pichai & Zuckerberg Court India

In August, when GOOG shocked Wall Street and abruptly reorganized into a holding company called Alphabet, it did so in part to retain its top talent. Instead of just one company, Alphabet is now comprised of many different companies, each with its own CEO who is charged with running it autonomously.

The main company within the Alphabet umbrella is Google itself, which retained its namesake search business, as well as other closely-related services such as YouTube, Android, and Gmail. Sundar Pichai, a brilliant engineer who grew up in India and went on to build products such as Google Chrome and Chrome OS, was named the new Google CEO in August.

For the first time since taking his post, he’s heading back to India to work on a strategy to attract new Internet users to Google’s products and services.

That said, he’s a little behind the times; Facebook CEO Mark Zuckerberg has already visited the country twice in the last 12 months, and has even devoted an entire team to making the FB experience smoother for users on 2G networks, which are rampant throughout India.

Both GOOG and FB also have wacky ideas, such as putting drones or balloons in the air with Wi-Fi-enabling technology, in an effort to get more Indians online.

For Indians who are online, GOOG is a big part of their online experience. The Google India page is the most-visited site in India, with Google U.S. taking second place and YouTube clocking in at fourth. So, who’s in third-place? You guessed it: Facebook.

In some ways, FB actually has a leg up on Google in India because it owns not just Facebook.com and Instagram, but more importantly the messaging applications Facebook Messenger and WhatsApp. Google, on the other hand, is bereft of popular messaging apps.

It’s true that India wouldn’t currently appear to be a big chunk of Google’s current business. The company took in $65.8 billion in worldwide revenue in 2014, making India’s contribution appear relatively minimal, according to the Wall Street Journal:

“In basic disclosure documents filed with India’s government, which show Google’s various advertising and engineering services in the country, Google India Pvt. said it had sales of 30.51 billion rupees ($454 million) in the year ended in March 2014…”

But India — both for GOOG and FB — isn’t in the “what have you done for me lately?” category. It’s all about future growth, which is where the real opportunities are for these tech giants. Incidentally, that’s also what the stock market cares about most.

The goal for Google India going forward is to successfully gain Indian consumers’ “mindshare,” so that when they go online they’re more likely to frequent Google’s sites — not Facebook’s — and subsequently bring in major ad dollars.

Onboarding Indian consumers to the Internet will be a long, multi-year process, but with both GOOG and FB devoting important resources and attention to the country, Silicon Valley seems to think the wait will be worth it. It’s good to see Google’s CEO paying India some attention, and investors should keep a close eye on how the Indian market develops.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/12/alphabet-goog-googl-facebook-fb-india/.

©2021 InvestorPlace Media, LLC