Another major benefit for expanding access to the Internet is that it helps Google to enrich its consumer behavior databases. After all, this database is the backbone for catering targeted advertising centered on the individual consumer. This is already evident when we use Youtube or Gmail where placed advertisements are either ‘context’ specific or ‘user-interest’ specific. Since studies have shown that such targeted advertising works very well, Google has set its priorities in creating a robust, expansive and yet dynamic database to help this targeting. In this respect, it makes sense for Google to invest in this area, even if the potential returns in the near future are not very lucrative. The author of the article Amir Efrati mentions this key motivation behind market expansion in emerging economies. Otherwise, it would not have been obvious to the reader why such huge investments would be devoted to regions with modest revenue prospects.
Coming to the drawbacks of the article, it contains too many references to vague sources. For example almost every purported fact is attributed to “these sources said” “people familiar with Google’s plans said”, “researchers said”, “said people with direct knowledge of the matter”, etc. Nowhere are references to names or institutions from which information is being gathered for the article. Coming from a reputed journal as the Wall Street Journal, this practice undermines the credibility of what is written. It is as if the author is worried of libel suits from Google and Mircosoft – the projects of these two firms being speculated in the article.
In terms of its relevance though, the article is useful for students of Managerial Economics, for it presents a current and important development in the Information Technology industry. The student will learn that the world of business is very complex with multiple factors impinging on any managerial decision. And most of these factors do not show up in the annual reports, like, say, the political atmosphere prevailing in a particular market. Amir Efrati mentions how Google is lobbying hard to garner political support for installing its independent network infrastructure. The governments are faced with satisfying the safety requirements of the proposed high frequency devises. This is a legitimate precaution, for electromagnetic radiation from wireless antennas and receptors are feared to cause cancers in humans. This is one of the reasons that Google’s plans in trying out new technologies are being delayed. Secondly, politicians cannot antagonize their native contingency in terms of conventional network providers and related vested interests. Hence, there are numerous factors at play behind business operations – not all of them are straight forward. This insight is quite useful for the student of Managerial Economics.
Hence, overall, there are more positives than negatives associated with the article. Written in neat and easy prose, the article is largely devoid of technical jargon. Thus, it is accessible to students at all levels.
Efrati, Amir, (Updated May 24, 2013) ‘Google to Fund, Develop Wireless Networks in Emerging Markets’Retrieved from <http://online.wsj.com/article/SB10001424127887323975004578503350402434918.html?KEYWORDS=expansion+markets> on 25th May, 2013