Google sees "huge" Latam online market opportunity

By Pascal Fletcher

MIAMI (BestGrowthStock) – Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) is looking to partner with computer manufacturers and telecoms companies in Latin America to connect with what it sees as a “huge” growth opportunity for getting local businesses online, the company’s top executive for the region said on Thursday.

With Internet penetration in Latin America and the Caribbean still comparatively low at around 30-35 percent, the region is the fastest-growing regional market for the world’s No. 1 search engine company, Alexandre Hohagen, Google’s managing director for Latin America, told Reuters.

“Last year, 2009, we grew almost 80 percent in Latin America and this year we’re going to grow very close to 80 percent again,” he said in an interview in Miami.

Brazil remained Google’s main regional business market, as well as Argentina and Mexico, but the company also responded to rapid growth in Colombia, Chile and Peru by opening offices there. New offices were also planned in Panama, covering Central America and in Puerto Rico for the Caribbean.

With only 200 million of Latin America’s 600 million population connected to the Internet, “I’m sitting in a region with 400 million potential clients, and only two languages (Portuguese and Spanish),” Hohagen said.

“There is a huge opportunity,” he added. The widely used English phrase “to Google for (search for)” something on the Internet had passed effortlessly into both Spanish (“Googlear) and Portuguese (“Googlar”).

Hohagen estimated Google dominated the Latin American Internet search market with a 88 percent share, compared with its 57-60 percent in the rest of the world.

He said an estimated eight million small- and medium-sized Latin American companies were not yet connected online and Google wanted to tap into this massive potential for corporate connections and online advertising revenue.

“We want to partner with PC manufacturers and telecoms companies to offer PC connections and products to small- and medium-sized businesses in Latin America,” he said.

The initiative, to be called Conecta, would offer a “one stop” destination where companies would be able to obtain the tools they needed to bring their businesses online, including building a website for online marketing.

“We are still in negotiations, discussing with some partners, Latin America-wide, companies like HP (Hewlett-Packard) (HPQ.N: ) or Dell (DELL.O: ), or Positivo from Brazil, all of those companies could be an interesting partner,” Hohagen said.

Conecta would be offered in Brazil and other Latin American countries and would be similar to Google’s Getting British Businesses Online initiative that the California-based company launched this year with BT Group (BT.L: ) and other UK partners.

“This is a way of penetrating the corporate world with PCs and connections in Latin America, it’s essential for the development of the economy in the region,” Hohagen said.

“It’s almost like bundling everything, it’s like ‘plug and play’ for a small business,” he added, saying he believed Google’s Conecta initiative would launch in Latin America in the first quarter of next year.


“Imagine the little shoemaker’s shop in Colombia that wants to export its shoes to a different country, they need to have this presence, they need to get their own website, they need to learn how to advertise for different countries,” he said.

Hohagen said that while online business advertising still lagged in Latin America compared with other parts of the world, he believed the region’s economy, like other emerging markets, was recovering faster than more mature markets from the recent global downturn.

Although traditional media like TV remained strong in the region, especially in Brazil and Mexico, he saw technology trends and use, and consumption habits changing.

“What is happening is that the new generations are much less connected to TVs than we were before … People are migrating their attention to the Internet,” Hohagen said.

“If you look at the ratings of the soap operas in Brazil they are going down dramatically and in part it’s because of the Internet,” he added.

Despite the rapid worldwide expansion of Facebook, Hohagen said Google’s own social networking site Orkut was a revenue success in Brazil and he saw room for further development.

“What we are doing is mapping out the social graph of Latin America to see if there are opportunities for us to launch Orkut in other countries,” he said. This “social graph” involved identifying the most popular universities, soccer teams and musical artists in Latin American countries to be able to better attract new members to the social network.

(Editing by Bernard Orr)

Google sees "huge" Latam online market opportunity