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Direct from the big boss

Google CEO Eric Schmidt engages with leading Egyptian media CAIRO: Internet search company Google announced this week that open sign-ups to Gmail, Google’s email service, are now possible in Egypt. Generally, people need to be invited to Gmail by someone else who already has an account. Democracy has arrived though, as Egypt has become only …


Google CEO Eric Schmidt engages with leading Egyptian media

CAIRO: Internet search company Google announced this week that open sign-ups to Gmail, Google’s email service, are now possible in Egypt. Generally, people need to be invited to Gmail by someone else who already has an account. Democracy has arrived though, as Egypt has become only the fourth country in the world to receive the privilege whereby accounts can be had by just visiting www.gmail.com.

The powerhouse company also announced that it has struck a deal with Egypt’s education ministries to offer the Ministry of Higher Education’s 3 million university students and the Ministry of Education s 8 million preparatory students a free suite of Google applications for email, instant-messaging, and calendar.

It is not the only foreign company to be investing in the Internet infrastructure in Egypt and the Middle East. And it seems that the more success it has, the more criticism, and comparisons with Microsoft, it receives. Just this Thursday, Microsoft launched an online library, in a move that pits the world s biggest software company against Google s controversial project to digitize the entire world s books.

In a rare event for Egypt, Google’s Chief Executive Officer Eric Schmidt not only visited Cairo, but invited a select group of journalists to an intimate discussion about the company’s plans for Egypt and the Arab-speaking world.

Schmidt spoke of the importance of its new regional base in Egypt, saying, “There are maybe 300 million Arabic speakers that are our target population right now. It’s under-penetrated – the numbers are anywhere between 4 and 10 percent – so you have tremendous potential upside.

Schmidt continued, “I believe that Arab societies will benefit from the broad use of the Internet. Not everything in perfect, not everything is sanitized; there are bad voices as well as good voices. But the overwhelming benefits to the Arab countries, to the governments and to the rulers are a more globalized, more sophisticated, and I think a wealthier population.

Despite its prominent office launch in Egypt, Google is still the search underdog here, waiting in the shadows of Yahoo. Schmidt seems unfazed though. “If you only have 5% of the people online, then 95% can’t use Google. So we’d like to get that number to 50, 60, 70 percent – then I’ll worry about the competition. When you have a market that is so under penetrated, it doesn’t matter what anyone else is doing, he said.

While PC-based Internet usage is low in Egypt (8 percent according to Google data) due in large part to low per capita income that limits computer penetration, there are high hopes given that mobile phone penetration is double that, at 16 percent. The Daily Star Egypt asked how Google might benefit from mobile popularity and handset convergence in Egypt. “It’s not unique to Egypt; it’s true everywhere now, responded Schmidt to my query. “Mobile phones are growing at twice the rate of PCs and there are three times as many of them – we know the winner. The base-feature phone has a reasonable enough [web] browser that you can really use it.

Given that Google’s income stems mostly from web-based advertising, with 2006 profits expected to clear $3 billion, it has nothing to fear profit-wise in the near future. As reported by AdWeek this Thursday, research firm eMarketer reported that online ad spending is projected to hit $16.4 billion in 2006. These figures will continue to rise, forecasted to grow by 19 percent in 2007, then by 22 percent in 2008, to a total of $23.2 billion.

Like advertising via TV and other media, online advertising rates are largely based on eyeshare. Sure enough, Google recently plunked down $1.65 billion to buy video sharing website YouTube, a runaway hit serving up more than 100 million videos each day – a potentially massive ad opportunity. The Daily Star Egypt asked Schmidt how this costly YouTube purchase could possibly be about giving people a social or political voice, rather than the vast potential ad revenues to warrant the purchase price. “We’re not focused on the advertising at all, claimed Schmidt in response. “We bought YouTube because it was so incredibly popular, and because we like the technology, we like the people, and because they wanted to sell.

I had the opportunity to ask the final question. I inquired about how easy it is for Google to hold to its ‘don’t be evil’ mantra given its new-found status as a corporate heavyweight, indicated not least by its stock having just broken the $500 a share mark. “It’s very easy because we don’t focus on a spot price. One of the things people find frustrating about Google is that we say that we’re not focused on the short term, and we say over and over again that we’re willing to make the investments necessary for the long term even if it affects [Google] in the short term.

Going back to the parallel with Microsoft, it was through mass dominance that the company’s CEO, Bill Gates, rose to become the richest man in the world. Eric Schmidt has moved to a $1 annual salary, which is a moot point given that, by CNN Money’s estimate, his own Google shares already have an approximate value of $5.7 billion.

Schmidt’s comparisons with Gates may only increase.

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https://www.dailynewsegypt.com/2006/12/09/direct-from-the-big-boss/
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