TL;DR:
- Google is strategically exploring the Asia-Pacific (APAC) region with a focus on generative artificial intelligence technology.
- The Search Generative Experience (SGE) has been introduced to enhance internet search services with generative AI.
- Initial markets for SGE include Japan and India, driven by high interest, with potential for Korea to follow.
- Google’s success in APAC is underscored by $47 billion in sales, accounting for 16% of global revenue in fiscal year 2022.
- The company aims to diversify its revenue streams in APAC, including cloud computing, hardware sales, and online advertising.
- The challenge is to create a transition path to AI, with generative AI being a valuable tool for small and midsize businesses.
- Despite a presence in China’s developer community and hardware partnerships, Google remains absent from the consumer services market due to past issues.
Main AI News:
In a strategic move, Google is set to explore new horizons within the Asia-Pacific region, with a particular focus on generative artificial intelligence technology. Scott Beaumont, President of Google Asia Pacific, shared this vision in an exclusive interview with Nikkei Asia, shedding light on Google’s evolving global strategy.
“The pivot in understanding that Asia is where the opportunity lies,” Beaumont emphasized. “Asia is where we can learn from,” he added. This shift in perspective has led to the launch of a beta version of Google’s Search Generative Experience (SGE), enhancing its internet search service with the cutting-edge power of generative AI technology.
Japan and India have taken center stage as the initial markets for SGE, following its successful rollout in the United States. Beaumont highlighted their exceptional interest, signaling Korea as another high-potential candidate in the AI landscape. Google, which celebrated its 25th anniversary in September, has transformed from a mere search engine provider into a conglomerate with six services catering to over 2 billion users worldwide. Notably, the number of devices running its Android operating system has now exceeded a staggering 3 billion.
Beaumont reminisced about Google’s earlier days when expanding into Europe was the natural progression. However, with the advent of AI, the focus has shifted. “It’s not Europe next, it’s where in Asia do we go?” he asked, underlining the profound shift in Google’s expansion strategy.
Alphabet, Google’s parent company, reported a remarkable $47 billion in sales within the Asia-Pacific (APAC) region for fiscal year 2022, accounting for 16% of global revenue. In contrast, Europe, the Middle East, and Africa contributed $82 billion, constituting 29% of global revenue. Beaumont attributed this success to the sheer scale of the internet population in APAC, coupled with the region’s remarkable economic growth and increasing digital penetration.
With an ambitious outlook, Google aims to diversify its revenue streams in the Asian market. This includes expanding its footprint in cloud computing services, hardware sales (smartphones), and its evergreen online advertising platform.
Beaumont posed a critical question for the future: “How do you create a transition path to AI?” Generative AI, he suggested, could be the answer—a valuable tool for small and midsize businesses in the APAC market. According to Beaumont, demand for this technology is soaring among such enterprises, promising to revolutionize their productivity.
Beaumont made it clear that while Google is keen on expanding its horizons, mainland China remains an exception. “We don’t have any of our consumer services” in the Chinese market, he noted. This decision is rooted in Google’s stance on internet censorship and cyberattacks, leading to the cessation of its search service in China in 2010.
Nevertheless, Beaumont acknowledged the vibrancy of the Android developer community in China and the numerous hardware partnerships the company enjoys. This presence allows Google to stay closely aligned with innovation in the region.
Conclusion:
Google’s strategic pivot towards the Asia-Pacific region, fueled by generative AI technology, highlights the immense growth potential in this dynamic market. With initial successes in Japan and India and further opportunities on the horizon, Google is poised to tap into the region’s burgeoning internet population and digital economy. Diversifying its revenue streams and embracing generative AI will be key to sustaining its growth and relevance in the APAC market. However, Google’s cautious approach towards mainland China reflects the complexities and challenges of operating in this highly regulated market.
