ET’s Surabhi Agarwal and Raghu Krishnan in an exclusive interview that it was committed to solving for greater access in the country. Next year, it will invest in areas such as AI for social good, small and medium enterprises and startups, he said.
Edited Excerpts:
India is the largest market for Google in terms of users, but revenue is still low. What will be the key drivers of revenue going forward?
The internet is becoming deeper, and people are not only engaging and spending time to either learn or to entertain, but also pay digitally (through UPI) to avail of either products or services. From a revenue point of view, if you look at the global scenario versus India, India has a low per capita income and is a much smaller advertisement revenue market. Over the next five years, advertising revenues will start growing more significantly, especially led by digital, tech and startups, because they would like to build new brands and new businesses. They would like to be very targeted. I see a growth of advertising revenues on digital in future… We want to focus on making our products available at scale and accessible to consumers. Our business model has been largely led by advertising. The one big paradigm shift that we see is our cloud services, because that’s a B2B business, and we start earning revenues as people start embracing technology with us. That shift opens up another opportunity for our revenue capability, which is meaningful as you move forward. We see advertising to continue with it, but the cloud business is really opening up the next set of opportunities.
Do you see India widely adopting a subscription-led model?
The adoption will only increase. We are seeing (that) across many products; if you look at gaming as an industry, it is starting to grow. People are transacting digitally more and more, but the reality is that the amount of money that people pay or can afford to base is very limited. The adoption in numbers will grow. Revenues will still be small but that’s an important opportunity to shape the future.
Given that ticket sizes and ad revenue are small in India, where does the country stand among Google’s top revenue generating markets?
The number of consumers in India who embrace Google is pretty large, but the revenue that we have is much smaller compared to the global markets. As the internet becomes deeper, the revenue per consumer will be low, but the overall revenues have started increasing. To me, that’s the journey over the next five years, as we move from roughly 600 million to a billion users in India in the next four or five years. India starts becoming meaningful and significant because of the scale of the number of consumers even though they have small money. For the consumer, it will become meaningful enough.
Last year, Google made several investments in companies like Reliance Jio, InMobi’s Glance etc. In the coming year, what are your investment plans?
We are making strategic investments which can help drive the agenda or be the catalyst for digital transformation. In access and language, we have done a few investments. We invested money in dotpay because that’s something that can enable Google Pay more significantly as we move forward. The other area where we believe we can play a role of a catalyst and transformation is for small and medium enterprises. We are committing a lot more assets and resources to it. The fourth area would be in AI for social. So, access for better services, SMEs and AI for good or social impact are areas we are looking for investments.
What is your view of the Indian startups space, which has seen a slew of IPOs and capital flowing in?
The reality is that we (India) are likely to become a $4 trillion economy… (of which) $1 trillion will be digital. I’m sure 50% of that will come from startups. Fundamentally, the growth of the Indian economy will be driven deeply by startups in a very significant way. So, our commitment to startups is very, very high. We have touched more than 80 companies in India with the Google for startups accelerator that is in its sixth year. Those companies have been able to get close to $2 billion in investments. By partnering with them, we remain very committed to solve for them through our Google Play Store because that’s what really enables and provides the backbone for the growth of that industry.
What are your views on the regulatory policy landscape, with the IT intermediary guidelines, the data protection bill and conversations around non-personal data all set to change how tech companies like you operate?
We welcome regulations because we believe as the internet becomes mainstream in the country, that’s the only way to have a good, trusted, safer internet for everybody to use. We need to have regulations to support growth of the businesses across many verticals and businesses. The personal data protection bill will go a long way in supporting and ensuring that we take care of consumers deeply and hold companies accountable. We need to ensure that we enable innovation to happen within the framework of PDP. We are deeply supportive and appreciative of regulation coming in… we did the same thing when the Intermediary Rules came in. We believe that’s the law of the land and we need to follow those laws. We partner with the government very deeply to ensure that we implement well, and wherever there is a conversation or a concern, we deal with the government to see if there is an area that we believe will come in the way of user choice or innovation, that’s when we need to thoughtfully engage.
One of the arguments against Google is that you are a virtual monopoly in most areas. How do you deal with criticism?
As one of the Big Tech, we do think as the internet and technology become more deeper, the scrutiny on us is going to be bigger and bigger. That’s the reality. That’s going to happen more in the future than now. We have been very responsible and committed to consumers as you develop our products and services. We believe we can solve for enabling access because I think the whole idea of making the internet helpful and safer for a billion Indians is what we are committed to… Therefore, in my mind, being committed, explaining what we do, wherever there is a question, enabling people to understand what our policies are, what our products are, what our services are, and helping them appreciate our perspective, is the thing that we invest a lot of time and energy on. We explain because technology is complex, and it is new and changing fast. The real answer is to be really good at understanding when questions come to us and spending enough time to explain, deliberate and get people to see what you’re doing.
At some point, there will also be demands for your algorithms to be audited, and there will be more scrutiny. What’s Google’s view on that?
We have dealt with it on a case-by-case basis. I think what we do is in consumer interest. I can speak for India, and when cases come to us that question whether we are being fair and say that ‘you are being monopolistic’, we have been able to explain those positions well. So, I think we’ll continue to deeply engage to explain our positions. I also understand that the scrutiny will only become higher given the nature of business here and given the nature of change.
