Google Planning A Big Push In India This Fall

Sundar Pichai Google IO Android One

Google is planning a big advertising campaign for its Android One initiative in India this fall, according to several recent reports.

The Information’s Amir Efrati claims that Google is telling potential partners in the country that it is planning to spend “at least several hundred millions dollars” to boost awareness for phones made as part of the Android One initiative.

The Economic Times of India’s report cites a much lower number: approximately $17 million. The Economic Times also states that the push will begin in October and that Google SVP Sundar Pichai will visit the country as part of the launch effort.

While the figures don’t line up — which could simply be due to sources talking about different time frames, i.e. Google could spend $17 million right away with more to come based on how well the campaign does — the news itself makes a lot of sense.

The Indian market is huge and smartphones haven’t penetrated there like they have in the United States or even other emerging markets like China. According to IDC data, smartphone penetration in the world’s second most populated country is at about 10% despite 186% year-over-year growth for the category in the first quarter of 2014.

With Android One, Google is looking to make it easier to launch affordable devices in emerging markets. It’s working with suppliers to ensure cheap but powerful parts used by OEMs will be compatible with the latest versions of Android, providing access to the Google Play Store, and handling updates to the Android operating system while still allowing device makers to install their own apps on devices.

At Google I/O, Google’s Pichai announced that the company is working with Micromax and other device manufacturers in India to bring multiple devices in the ~$100 range to the country by the end of the year. That’s a price range that’s proven to do well in India, with Motorola’s low-margin lineup selling a million units within five months of entering the market.

By getting in while the Indian smartphone market is still in its infancy, Google has a chance to capture a significant portion of it as people are still deciding their preferences in operating system. The Android One initiative is important Google because it gets people into its Play Store ecosystem instead of smaller third-party app stores generally offered on the millions of cheap phones and tablets sold in emerging markets running the open source version of Android.

While it’s not bringing in a lot of money just yet — India has yet to crack the top 5 countries in terms of revenue for Google Pay — App Annie’s latest Market Index suggests that Google is at least doing a good job of getting users into its app ecosystem, with India outpacing South Korea and Russia in terms of download numbers. That puts the country right behind the United States and Brazil, the 1st and 2nd largest countries by app downloads, respectively.

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Humans And Computers Will Come Together For Middle Work

Editor’s note: David Greenbaum is CEO and co-founder of Boost Media. Previously, David worked in venture capital and at Goldman Sachs, and was director of strategy and M&A at Interval Leisure Group.

Jon Evans’ post “Welcome To Extremistan! Check Your Career At The Door” on TechCrunch warns of mass penury for this generation and the next as the dual horseman of the techno-apocalypse, robots and software, strip humans of their ability to make a living.

Essentially, he predicts machines and algorithms will consume jobs faster than we can create them. Don’t believe this dystopian vision of the future for a second, because both humans and robots will contribute to the economy in generations to come through a concept called “middle work.”

Today, non-manufacturing work largely falls into one of two categories: purely human (a judge serving sentences) or purely software (a computer serving search results). However, there’s an emerging category called middle work that is neither purely human, nor purely software. This new labor category combines both algorithms and human thought processes and will be an impactful economic driver in the next decades.

Middle work leverages what machines do best – solving low-value, high-volume problems – and combines it with what humans do best – solving high-value, low-volume problems.

Middle work is not just “information work” where humans use computers to complete tasks like millions of people do every day in the office. Rather it’s defined as work that wouldn’t be economically viable for a human to do without a workflow platform, yet  is too nuanced for software to perform unaided. For example, software is great for spellchecking a marketing email, but only a human can think creatively to write an engaging headline to get consumers to click on that email.

Between these two extremes exists a middle-work world where humans use software to make the process of writing ad copy more automated and efficient. In this example, middle work might entail hundreds of copywriters using an online network to contribute potential email headlines, allowing a marketer to choose among dozens of headline options and submit several choices for A/B testing. Contributors whose headlines are chosen would earn money for their work. For marketers, this process is more streamlined and cost-efficient than hiring a stable of copywriters.

Of course, over time, software will become more advanced, but it will never be as good as people at jobs that entail creativity, judgment, empathy and a raft of other uniquely human traits. Middle work combines efficient software algorithms with human ingenuity to create a whole new class of jobs – opening up a large swath of economic opportunity. Humans will be able to use software to perform high-value, low-volume tasks with high levels of precision and accuracy.

In many ways Amazon’s Mechanical Turk was the first software-based middle work company. Today, people use Mechanical Turk to solve low-value problems such as classifying the subject of a picture. But the emerging trend is for middle-work companies to verticalize and specialize, allowing humans to leverage software platforms to solve higher-value problems. In middle work, a workflow platform creates standardized units of work, while a marketplace of human labor provides pools of workers who bring creativity and judgment to the tasks at hand.

To make it clear why middle work will become commonplace, consider the following examples: A non-native English speaker wants to verify whether she is using idioms correctly in professional correspondence. A small business owner wants to file his taxes using QuickBooks but isn’t sure of the correct categorization of a deductible 401k plan. An executive needs an accurate transcription of a meeting, but also to clearly identify each of the speakers and their importance to the group.  All of these issues could be solved by web-connected humans using advanced software platforms.

Because middle-work participants don’t have to find the work themselves (the network provides the work opportunities), they can work at lower per-unit costs but still make substantial per-hour rates because their time is spent only delivering work – not prospecting, invoicing and managing clients.

For many industries, the size of the addressable middle can be larger than the head (top-level salaried positions) or the tail (low-value contract work).  A handful of emerging companies are lowering the cost of producing a unit of work by combining software with human labor.

By addressing the middle, companies are not taking jobs away from people who were doing them before, but rather are adding jobs by unlocking a category of work that didn’t exist in the purely human or purely software realms.

Unlocking the middle is a massive opportunity for entrepreneurs, employees and customers alike in industries as diverse as medicine, accounting, law, and music discovery.


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Why are digital music merchants ignoring emerging markets?

Andrea Boetti is a Business Development Manager at Fortumo, helping web and app developers and digital content merchants build out their monetization strategies for emerging markets.

Spending on smartphone content is shifting away from Northern and Western markets and heading South and East. Emerging markets will soon exceed the US and Europe in smartphone ownership and as a result, most people looking for entertainment on their mobile devices are also located beyond the mature economies.

Yet many of the big digital content distribution platforms like Pandora and Netflix are not available in countries like Brazil, Turkey and India (Spotify just recently entered Brazil). Why is that?

The easy answer is legal rights: music, e-books and videos are usually licensed on a country-by-country basis, and even large platforms need time to expand their business to new markets.


listening to music 730x454 Why are digital music merchants ignoring emerging markets?

Unlike mobile apps where the content creator is also the distributor most of the time, digital content has a much more complicated distribution process behind it. This problem certainly delays expansion but can be overcome by localization: something completely ignored by most digital content merchants.

The assumption for platform owners and content distributors is that people want to consume the content they have obtained rights to: Western pop music owned by a few large record labels.

While this may be true in markets with strong cultural US influences, 80 percent of the world does not speak English. Have you heard of artists called İrem Derici, Yalın or Бурито? They are artists on top of music charts in Russia and Turkey.

The point here is that often consumers in emerging markets prefer local music. Merchants like Gaana in India and Yala in the Middle-East have proven that providing users access to local music can be profitable as well and increase the number of their users.

Where the money comes from

Another concern holding Western merchants back is the incorrect assumption that there is less or no revenue to be made here. This is reflected in Spotify’s pricing strategy for different regions as it is pretty obvious users in the Philippines have less money than those in Luxembourg.

Often the monthly subscription model is simply inefficient, or just not enough to ensure the huge opportunity for user acquisition offered by the emerging markets. To put things into perspective, the average top-up sum for a pre-paid SIM card in India is 10 INR (0.17 USD) and the average balance is 30 INR (0.50 USD). 

With such low revenue numbers, processing credit card payments becomes unviable to due to fixed fees that are higher than the one-time purchase received from the user. The best way to resolve this is to forget about monthly packages in such markets and transition into daily and weekly billing of users.

From our own payments data, we see that daily access purchases work about four times better than weekly ones – so it’s pretty easy to understand how monthly packages are not an attractive value proposition, except to a tiny share of high-end users. 

pandora android 1 730x280 Why are digital music merchants ignoring emerging markets?

Reaching users in emerging markets is becoming a critical issue for merchants as services like Popcorn Time are gaining popularity and making illegal consumption of digital content seamless. Before Popcorn Time, finding and consuming torrents was for the “tech-savvy.” Now, they have become as user-friendly as reading news on the web.

If the user experience is the same, it’s now up to the legal merchants to create a value offer which is attractive even in low-income economies.

Digital content merchants cannot be expected to expand as quickly as mobile apps have – but understanding the need for localization and targeting mass markets with cheaper pricing (rather than high-end users, which has been the case in the West) will help speed up the process and will help to fight the growing threat coming from piracy.

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E-Book Platform Bookmate Secures $3M To Target Emerging World

Betaworks-style ‘startup studio’ Dream Industries – based in Moscow – has raised a $3 million Series A round from retail giant Ulmart (in Russia) to develop its subscription-based social reading service Bookmate. They plan to take the startup international out of Moscow, starting with Turkey, Scandinavia and Latin America. The funding is part of a $6.5 million package from Ulmart to Dream Industries, with the balance of the raise going to other Dream Industries projects, which include Exchang.es, Theory & Practice, Third Place, Telegraph and Zvooq.

Bookmate is a subscription “social reading” service covering mobile, tablet and web. It claims to have 1.5 million active monthly users in Russia, Ukraine, Kazakhstan and other Russian-speaking markets, including Turkey, and a conversion rate of 7 percent to paid subscribers accessing 400,000 books, and from 300 publishers globally.

The e-book market is big in the U.S. and U.K., but e-book consumption is just starting out in emerging markets. So Bookmate is focused on those developing markets where the competition is mainly local.

Bookmate connects publishers and authors with new markets and makes money by partnering with MNO, device makers, online retailers and local government.

Unlike Amazon, Google Books or iBooks, Bookmate is an open platform that connects publishers and readers directly. So publishers get access to user behavior analytics and have promotion tools for direct marketing. It means they “own” their relationship with their readers – very much unlike the big players we all know.

This is a very interesting move, especially as emerging markets are largely untapped by the biggest players as they really on a lot of infrastructure that doesn’t exist in emerging markets.

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Eyeing Expansion In The BRICs, eBay Doubles Down On Machine Learning And Context Translation

In 2013, eBay announced a big focus on growth in emerging markets for its marketplace, in particular, Russia, Brazil and China. Some of this growth can be enabled through localization, but the marketplace has tested a more technical approach — with machine translation — with its first big expansion effort in Russia.

To spearhead these efforts, eBay brought on machine translation expert Hassan Sawaf, a data scientist whose career spans more than 20 years in speech recognition and human translation technologies. He’s also the patent holder on hybrid machine translation, a system and method for using machine translation to translate from one language into another.

As Sawaf explains to us, language translation can be a source of friction between buyers and sellers on eBay, and his goal was to go beyond word-for-word translation into what he calls context translation. This means that Sawaf is helping build engines that ‘learn’ from context of the data (like item descriptions) rather than just more standard word-by-word translations.

Here’s the current problem eBay faces in emerging countries like Russia. eBay is trying to curate inventory from a global base of sellers and surface this to buyers in emerging eBay markets based on what ships to them in their respective countries. A Russian user can go to the localized version of eBay and see all products that are listed in Russian. When they are inputting search terms in Russian, this engine will produce search results of listings that match the query in Russian. But the Russian user’s query will not be able to see posts that match their query that were written by sellers listing in English. In order to access English listings, which do represent a considerable number of the listings on eBay’s platform, Sawaf explains, the Russian user would have to input the query on eBay in English.

“Machine translation normalizes this,” says Sawaf.

For the past year, Sawaf and his team of 14-15 data scientists and engineers have built a technology that allows Russian users to search in Russian, but be able to return queries with English listings that match. Sawaf’s technology takes it one step further, and will determine that a ‘purse’ in an item description, also refers to ‘bag,’ or ‘item,’ or ‘piece,’ providing a more accurate representation of the item in the Russian language. Sawaf says that the search technology, which just launched a month ago, returns signficantly more results for Russian eBay users. And twice the amount of users in Russia are inputting search queries in their native language. It’s unclear how this has translated into an increase sales and transactions in the marketplace, which is the ultimate goal.

Now that Sawaf has this scalable infrastructure in place, the team will be expanding this to other languages in emerging markets. We hear that the team is tackling Spanish and Portuguese, focusing on Brazil and Latin America.

Some e-commerce companies outsource some of the machine translation work to third-party providers, and eBay considered this, but Sawaf tells us that, “to develop the best, you have to do it on your own.” Plus, there is some third-party user data that eBay did not want to share with third parties.

We’re told that along with this improvement in search, eBay is also attempting to make improvements for Russian users with payments, shipping (an area that has faced some challenges in Russia) and other services in these markets. Another interesting takeaway is that eBay’s ultimate goal in these emerging markets is to offer more in B2C selling on the platforms, and find ways to get more local businesses selling on eBay online.

While eBay says Russia has been a No. 1 priority, it will be interesting to see how the improvement in technologies translates into actual sales. And how eBay’s localization performance in other markets will also be a way in which we can grade whether machine learning is working.

It’s worth noting that India hasn’t been a success story for eBay. As TechCrunch writer Pankaj Mishra wrote recently, despite entering India early, eBay has not become the dominant leader. eBay backed local e-commerce marketplace SnapDeal in a possible effort to make up for past mistakes. SnapDeal is six to seven times bigger than eBay in volume of business. Interestingly, Sawaf and eBay didn’t really mention India in the localization and machine-learning efforts.

But if eBay’s machine-learning technology can translate into an increase of sales in emerging e-commerce markets like Latin America and Russia, this could represent billions in new revenue. Stay tuned.

Photo Credit/Flickr

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The PC Market And The 300 Million Mark

Today IDC predicted that the PC market will contract by 6% in 2014, and will continue to decline at least into 2018.

Unit volume according to IDC would slip from 315.1 million units in 2013, to 291.7 in 2018. The figures include traditional PCs — laptops, desktops, and so forth — but exclude Surface devices, Android tablets, and iPads.

In short, IDC’s predictions now expect PC sales to fall under the 300 million threshold. In December, it had a different take, predicting a 3.8% decline in PC shipments for the current year, and then for PC sales to become “slightly positive in the longer term.” That would have kept shipments above the 300 million unit mark in something like perpetuity.

What this implies is that something changed, causing IDC to change its prediction logic. So, what happened? IDC is plain: Emerging markets are not performing as expected. After noting that as a group, emerging markets performed as expected in the fourth quarter, “concerns about the impact of slower economic growth, the culmination of some large projects, and conservative expectations for factors like touch capability, migration off of Windows XP, as well as continued pressure from tablets and smartphones has further depressed expectations going forward.”

The group goes on to note that “emerging markets used to be a core driver of the PC market.” Weakness there led to a shaving of expected growth rates, changing IDC’s prediction of a PC market north of 300 million units and just shy this year of growth, to an industry that can’t stop its own decline.

It’s important to keep scale in mind. IDC’s change in its view of the PC market was modest, but as its former optimism was more mild than tepid, those small changes are key. Here’s IDC detailing the shifts in its model: “Overall growth projections for 2014 were lowered by just over 2%, and subsequent years were lowered by less than 1%.” And that kids, is the ball game.

It’s hard to find any sort of good news in the above, other than to say that as far as declines go, there doesn’t appear to be another 2013 on the horizon. And, given that IDC is putting this data out now, presumably it’s had a chance to test the temperature of the current quarter, which while likely weak, should not mirror the incredibly bad 13.9% decline we saw in Q1 2013.

As a final note, as Microsoft’s ramps Surface revenue over time, we should start to factor those sales into IDC’s numbers. For now, those unit numbers don’t move the needle.

300 million. That’s the threshold PCs don’t want to slip under. But if IDC is right, Geronimo.


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BlackBerry Wants BBM Users To Have More Friends

It’s hard to turn that D into an R if you ain’t got friends. It’s with that thought that BlackBerry just released a tool to find friends on BBM.

The tool will scour your phone’s contact list for users currently on BBM, allowing the user to quickly send a PIN invite to other users. It will also allow for invites to be sent over SMS.

BlackBerry claims this is a feature BBM users have longed asked for. While that’s probably true, BBM is also widely seen as on of BlackBerry’s last remaining options. It needs every user it can get and the best referral is a personal recommendation.

Ever since it was released on Android and iOS, its messaging platform has seen notable gains especially in emerging markets where the BlackBerry platform already has a foothold. BBM is standing tall against the new kids on the block of Line and WhatsApp.

BlackBerry isn’t slowing BBM’s roll, either. BBM v2.0 is hitting soon.

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Gillmor Gang: Brand Royalty

The Gillmor Gang — Robert Scoble, John Taschek, Kevin Marks, Keith Teare, and Steve Gillmor — seem perfectly willing to predict the futility of the next Microsoft CEO, and even perhaps the next Bill Gates. But we can only successor-surf so long before returning to the more heady war of the social stream.

You can decide for yourself, but this feisty show was supercharged by @jtaschek’s minority report on the heir apparent and never really let up. From @kteare’s posit of Facebook devolution to everybody’s fascination with the mirage of brand loyalty, the emerging point is still elusive. Namely, that we’ll know it when we see it, and reward each and every app that fits into the puzzle with a notification seat at the table.

@scobleizer is right: it will be close to impossible to dislodge Uber, as long as someone comes along with another key function that extends, and then absorbs, the current shareholders of the new economics of app magnetism.

@stevegillmor, @scobleizer, @jtaschek, @kteare, @kevinmarks

Produced and directed by Tina Chase Gillmor @tinagillmor

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