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During Google Inc's (GOOG) Q2 '06 conference call, Heath Terry, a Credit Suisse (CSR) analyst asked about Google's strategy in Japan. Omid Kordestani, SVP of Global Sales and Business Development answered the question and my take from this limited information is that it still sounds like Google is struggling somewhat to understand Japan.

However, two key positive points are its determination (via continued investments) and its potential to increase revenue from ads, including mobile ads which it just launched. The PC/Internet penetration rate is high in Japan but I think everyone knows that mobile handsets rule.

Extract from Google's conference call.

Heath Terry - Credit Suisse

I was wondering if you could talk a little bit specifically about your strategy in Japan. Where is that business relative to, say, the service level that you've rolled out here in the U.S., and how do you view your market share progress there and strategy going forward?

Omid Kordestani

We've actually spent a lot of time on Japan recently, and very much interested in increasing our investments there. I think it's going to happen in multiple fronts. We are very focused on expanding our engineering and product presence there, as well as additional investments in our direct sales force, field sales forces, and service operations. The model is really working well there, and the economy is really improving there, and I think we just hope to be able to execute better to investments.

We also have been very successful with some recent partnerships -- the KDDI deal that we just announced; also with it had the launch of our mobile ads in Japan. We think, based on the early results -- it literally launched a day ago -- we are very optimistic about its performance. But we're excited about the market and we'll continue to invest in it.

Source: Google to Keep Investing in Japan