Google targets Brazil

26 April 2011

SAO PAULO: Google is planning to increase the scale of its Brazilian operations, in anticipation of a rapid improvement in local revenues this year.

Speaking to the Financial Times, Fábio Coelho, Google's chief executive in Brazil, was highly optimistic about the business opportunities afforded by this key emerging market.

"Brazil is a beautiful opportunity for the digital world," he said.

"Last year we grew 80% in Brazil in terms of revenue and we expect to grow at the same pace this year."

Latin America is thought to have delivered between 2% and 3% of Google's annual returns in 2010, with Brazil contributing around $500m.

One driver supporting Google's bullish outlook is the rising affluence of the Brazilian consumer, which has stimulated greater internet access and higher levels of online engagement.

The Brazilian government has launched a National Broadband Plan, with a slated investment topping $6bn from 2010 to 2014 to boost the penetration of high-speed connections.

Elsewhere, Android, Google's mobile operating system, similarly has considerable room for expansion, according to Coelho.

"Brazil has a very low broadband penetration and out of 200m or more mobile phones, only about 12m to 14m are smartphones. Most are pre-paid," he said.

"There is a big eco-system to be developed here."

In reflection of this, Google's Brazilian arm intends to increase its headcount by 50% in 2011 from approximately 350 employees at present.

Among the company's core areas of focus will be augmenting the advertising revenues generated through video platform YouTube, and enhancing the status of Orkut, its social network.

Brazil is one of the few major markets where Orkut has a lead over Facebook, with comScore reporting in October 2010 that the former site claims 29.4m visitors a month, and the latter 8.9m.

Data sourced from Financial Times; additional content by Warc staff