THE BLOG

Google's Algorithm Update Is Not For The Western World

30/04/2015 16:21 BST | Updated 29/06/2015 10:59 BST

Google recently began rolling out its new mobile-friendly ranking algorithm. The press were quick to predict 'mobilegeddon', suggesting millions of websites would disappear from the search results due to their mobile unfriendliness. I suspect, like the Year 2K scare, this prediction will be the triumph of imagination over reality.

But why has Google bothered to undertake what must have been, frankly, a monumental task? You don't change your search engine algorithm lightly in this day and age. It involves thousands of man-hours, months of intense work and testing, and is fraught with danger. If it goes wrong you risk losing money instantly.

The answer, from Google's perspective, is clear. Around the globe, we're fast approaching the point where more people search the internet using a mobile device than a static computer. In China for example, mobile internet use overtook computer access back in June 2014, and according to some reports, this seems to have been the crossover point globally. Today, if you've got a smartphone, you're going to use it to search the internet - and Google knows there's nothing more frustrating than websites that don't work properly on a mobile phone.

But in my view, what's really interesting about Google's update is who it's aimed at. Despite all the talk of how the update will affect UK e-commerce sites and national newspapers, Google is not making this change for the benefit (or detriment) of people living in economically developed Western countries. We are a happy accident. Yes, the update will benefit UK users but we're just not that important in the grand scheme of things. The money is in emerging markets. The user boom is coming from the East and Africa. And because home PCs are a luxury very few in the developing world can afford, it's those users who need mobile-friendly search more than anyone else.

Why am I so sure that Google's update is aimed at the emerging markets? One big pointer is that in September 2014 Google unveiled a $105 smartphone for emerging markets; a device that was the first to use their Android One platform; one that has been developed specifically to tap into the rural segment of the market and convert them into smartphone users. Google understand that emerging markets need different products to tackle their communications challenges. Yes, internet connectivity, speed and reliability are improving but in most cases they're still 10 or even 15 years behind the West. But the market and appetite is there and that's what's driving Google.

At the smartphone launch in New Delhi, Sudar Pichai, Senior Vice President, Android, Chrome and Apps at Google, said: "For us, Android One was a journey to try and reach the next 5 billion people. And India accounts for a substantial portion of the share. Android One was conceived deeply with India in mind." And I suspect not only with India in mind but all the potential users in every emerging market.

Close to the top of Google's list is no doubt Indonesia, which is now South East Asia's largest economy. According to IHS Global Insight, by 2021 Indonesia will have a larger gross domestic product than Russia, and by 2023 its GDP will double to two trillion dollars. To put that in some context, the UK GDP in dollars is currently only 2.6 trillion. So for a country with the history of Indonesia, to come from an economic standing start, these are truly impressive figures. And of course, when the GDP rises, so do the number of people who can afford mobile phones - and they want search engines that return websites that work on a smartphone.

The pace of growth in smartphone users across the developing world is astounding. By 2016, the world will have two billion active smartphone users, with China, India, and Indonesia leading the way. So it's not really surprising that when it comes to looking for new customers, you're not going to be that interested in Europe - or even to an extent, the USA.

Still not convinced by my argument? Well here's a final thought. Right from the start, Google has been very careful to play down its ambitions for the Android One smartphone in India and the emerging world. And, as predicted, the phone has not become an instant hit in India. But Google always think long term and this device is a small piece of its overall strategy. The major piece in the jigsaw is still playing out in America and the UK.

During the Mobile World Congress in March it emerged that Google have plans to join forces with Hutchison Whampoa, the company that owns the 3 mobile brand. This tie-up will allow consumers to use their phones abroad without roaming charges. But what the press failed to spot is that the holding company, Hutchison Whampoa Limited, owns the controlling share of Hutchison Asia Telecommunications Limited, a multinational telecoms company operating services in Sri Lanka, Vietnam, Indonesia and Thailand. Google has also started partnering with African providers such as Kenyan mobile phone firm Safaricom.

So if I was a betting man I'd say, based on its track record of innovative and disruptive strategies, that Google is currently setting itself up to exploit the growing opportunity for international calls and data throughout the emerging world. Which will of course, help sell a lot of phones. Watch out for a tie up with service partners in India very soon.