How a search engine created by two PhD students became one of the world's biggest companies is already the stuff of legend. But Google is looking forwards not back, says Lino Cattaruzzi, managing director in the MENA region
Given its omniscient presence in our online world, Google has passing similarities to some of the massive businesses that have helped shape Dubai and other cities in this region.
Founded in 1998 by Larry Page and Sergey Brin, the $760bn internet giant began just as the World Wide Web was in its infancy. The idea was simple: to find and determine the importance of individual pages online.
Like those aforementioned Gulf conglomerates that grew along with their respective cities, Google mushroomed with the popularity of what became the internet.
It created products that are synonymous with everyday life, such as Gmail, Chrome and its maps; acquiring others that you will almost certainly know belong to it, such as YouTube; and other applications that you might not, such as Waze, the navigation app that helps drivers alert traffic jams and accidents to other road users.
Google has been one of the world’s biggest success stories. Alphabet Inc, its parent company created in 2015 following a corporate restructure, reported sales of $32.32bn and profits of $9.70 per share in Q4 last year.
In Europe Middle East and Africa (EMEA), revenues were $10.3bn in the same period – up 24 percent year-over-year. The core ad business accounted for $27.27bn of its revenue, an increase of 24 percent year-on-year.
That core business model is quite simple and open. Google collects data from searches and from the use of its ‘free’ products. It then sells ads against that data – allowing businesses to specifically target customers and users.
For that reason, many who join the company and head up departments have a background in sales. This region’s managing director, Lino Cattaruzzi, is slightly different in that he was with US-based web portal AOL, building its operations firstly in his native Argentina, and then across the Latin America region.
In his ten-year career with Google, Cattaruzzi has moved from country to country, heading the tech giant’s online sales for Germany, Switzerland and Austria while based out of Dublin, where the country’s European operations HQ is located.
He also spearheaded the global sales strategy team for online media solutions at Google’s headquarters in California, and led the Google business in Argentina and Mexico as country director in each, before arriving in Dubai just over a year ago.
As with Facebook, that other digital leviathan, Google doesn’t release any financial figures for the region. But as managing director for Middle East and North Africa [MENA], Cattaruzzi describes revenues in the region as “very healthy”.
Nevertheless, he says the diverse nature of the MENA region means it’s a challenging business environment. He describes a high-income Gulf region and a North African one that is “on the other extreme”, where “the quality of connectivity, the number of devices and GDP per capita is much lower”.
Then there is Egypt, which has its own characteristics, and the Levant, where the language is different. “We try to cater for all,” he says of this diversity.
“I haven’t seen a region with so many people across such a broad spectrum, so we need to adapt and prioritise.”
He outlines those priorities, and top of that list is Arabic language content and being able to provide the correct search results across the region. “The quality of Arabic search results should be equal everywhere, even with such different dialects,” he explains.
“We need to use the best technology to understand exactly what you need, and machine learning has been great for making this a scalable process that adapts to the changing dynamics of language.”
To this end, a new neural translation service was launched in Google last year, which uses an approach similar to human intelligence to translate a language.
“So I can define what a cat is, or I can tell you that cats go ‘meow’, or I can show you cats with images and sound,” he explains. “Our process will understand finally that I’m talking about a cat as opposed to defining exactly what a cat is, and this is what we’re trying to do with Arabic.”
Despite the large-scale investment into Google Translate – which now numbers over 100 languages – Cattaruzzi insists there’s still value for the company in developing ‘free’ products such as these.
“We do this with many of our products because our focus is on the users,” he says. “Don’t get me wrong, we monetise some of our products very well but that is not the only reason why we create products.” Instead, he says, “We understand the value that we create and the impact that this can have.”
He is undoubtedly right about Google’s impact, whatever the motive. You could probably list over 100 of its products that have become part of everyday life, including Gmail, Chrome, Maps, YouTube and many more. Then there’s the line of products such as Google Home, the Android phone and its associated operating system that powers most of the phones in use today.
While Apple’s latest iPhones regularly top the charts when it comes to popularity among users in the UAE, its iOS operating system accounted for just 15.5 percent of overall market share last year, leaving the vast majority for Google’s Android operating system.
“It’s an open platform that I’m extremely passionate about because businesses can expand easily by creating apps and mobile websites to reach users,” says Cattaruzzi.
“It’s also a great way to get low cost devices to everyone. The combination of a great device and operating system is fantastic. We all love the new phones that are coming out [For example, Samsung’s new S9 uses the Android Oreo]. But what we really focus on is what you do with the information and the value that you can extract from the device afterwards.”
Cattaruzzi says that despite the region’s high mobile penetration, many websites are not mobile-friendly. “The number of companies that can properly engage with mobile users is not even half,” he says. “The time it takes for those sites to load is not what it should be, and not necessarily because of connectivity, but due to the technology they use to create their site.”
For Cattaruzzi, this represents an opportunity for Google and he says that helping businesses get online is a key priority. He cites the example of Egyptian mobile app Vezeeta – where users can search for a medical specialist and book online – as one of the more disruptive ideas in the region. “They are doing 80,000 bookings per month, so it’s getting traction.”
So where does Google fit into a scenario such as this? Cattaruzzi replies that the tech giant focuses on how it can maximise the readiness of programmers and business individuals to be ready to tackle transformational opportunities such as this one.
“We’ve launched a number of programmes with different governments and we have active sessions on coding for businesses,” he says, outlining a few examples.
“We trained 1,300 programmers in Egypt for our Mal Mobile Application Launchpad, which we ran in partnership with the government to improve the quality of mobile app development.”
Google also works with the Misk foundation in Saudi Arabia to help young men and women browse the internet smartly and safely. In the UAE it has signed a partnership agreement with Dubai Chamber of Commerce to make businesses with an online presence more accessible in an easy and scalable way. “We are lowering the barrier for regional businesses to be easily found online,” he says of the initiative.
His advice for businesses looking to get online is to first have a digital strategy. The second one is to “move fast”.
“You see the difference in the results of companies that are moving faster than those who are just waiting, and then one day realise that they have lost time.”
The third step is to capture the full opportunity to grow from a local business to a regional, and maybe even a global, business. Cattaruzzi says the potential to scale is easier than ever before. “Payments are becoming very easy to do from around the world; logistics are getting better as well, and that also applies to most of the countries in this region.”
Another massive potential growth area is in the cloud technologies space. Google Cloud Platform service might be a long way behind Amazon Web Services (AWS) and Microsoft Azure in terms of market share – in Q4 2017 AWS had 62 percent, Azure stood at 20 percent, while Google’s share increased from ten to 12 percent – but the market is rapidly evolving at a rate where it is impossible to say who will dominate in future.
“There is a huge shift in the industry where computing is moving from individual servers to cloud-based services where you can freely scale up and down and implement in a very different way,” he says. “We help on that journey as you move away from traditional infrastructure, and that includes things like machine learning, for instance. We are developing algorithms to apply this technology to improve your processes.”
Purchased by Google in 2006 for $1.65bn in stock, YouTube is now worth more than $70bn on its own – and the surge in video use is probably only just really starting in earnest.
The MENA region ranks as one of its biggest success stories, and is ranked second in the world by the number of daily views. Google is set to grow this further with the opening of a YouTube Space for content creators in Dubai Studio City. Not intended for UAE use only – KSA, for example, is a much bigger market – Cattaruzzi says people from across the region will have access to the facility.
“The purpose is to provide the best quality platform for creators to produce their content and also to provide training,” he explains. “We will give recommendations so their videos are more effective. And when you get these best-in-class examples, other people get inspired in the way they create their own content, so you raise the bar for everyone.”
Once again, Arabic is a massive focus for Google in developing its YouTube presence. “Saudi Arabia is one of the most successful countries in the world in the number of hours of internet use, and we have a team specifically dedicated to developing the creators there. We really want a lot of Arabic content that is mostly catered for this region,” he says.
To aid that process he says that Google has a developers’ relationship team and multiple events to engage with programmers and engineers on how to improve their coding and applications. And once again, he says, “It raises the bar on how this region is equipped to go out and take their solutions further.”
Google’s hardware products –ranging in scope from phones, tablets, laptops and desktops, to wearables, speakers and homeware IoT products – are directly available from Google in 32 countries around the world, none of which are in the Middle East.
While it’s possible to buy them on the grey market, there are no specific plans for Google to launch its products here. Even when the Nest Learning Thermostat – an energy-saving product that learns what temperature suits you best – was launched in the UAE recently, it was only sold through the likes of Noon.com and Etisalat.
“It’s something that we will explore in the future,” Cattaruzzi reveals, before explaining why they’re not yet officially launched here.
“You see in many of countries where they’re available that there are already waiting lists. The issue we have is that we don’t produce enough, because the products have been such a big success, so we have to prioritise markets.
"And you need to make sure that when you do introduce stock, you give the users the right experience, because then you need to have units and you must provide effective after-sales care activity. It’s more complex than just putting the boxes on shelves here, so that’s why we are taking this very seriously.”
From a business perspective, Google’s most important products are still those that drive its sales. In all, 15 of its global products are available here, while Google Surveys – a customised market research product – is due to come to the market soon.
It is no surprise, then, that in the Dubai office, most of the 180 people a work in the commercial side of the business, though Cattaruzzi is keen to stress that these aren’t cold-calling sharks.
“We call it consultative sales. What we do is partner with small, medium and large companies in many different ways to help them in this transformation onto the digital journey.”
And make no mistake, this journey is something that every business, regardless of scale, needs to make according to Cattaruzzi. “If you think about how much time you spend with your mobile phone today as opposed to five years ago, or how you spend your time and the way you do things, this change has affected everyone in society.”
Google sees its role as helping companies to transform and adapt to this new era.
It does this with large companies directly and then with a number of scalable online programmes for small outfits. “Ideally we can touch even a single professional trying to acquire new customers.”
In the battle for digital revenues, Google and Facebook have the market cornered at this stage, with the two companies accounting for about three-quarters of US online advertising – a trend that is increasingly mirrored in this region. Traditional media companies find themselves having to boost content in an effort to garner a greater audience for their own advertisers – in effect giving away their content and paying for the privilege of doing so.
Cattaruzzi insists that the relationship works both ways. Google helps publishers earn revenues through products like Ad Sense, Doubleclick, Ad Mob and Accelerated Mobile Pages ads. “We can help you define your strategy, best practises and the type of ads that you need to have,” says Cattaruzzi. “We can also place ads into your site and if the ads perform well you’ll get more and more of them coming to you.”
He summarises the strategy as this: “Creating more and better quality content, focusing on the region and on Arabic content.” All this, he says with some understatement, adds up to “a lot of value”.
“Dubai is a perfect example of how the government drives innovation. We’ve seen that with its drone races, you’re seeing the start of virtual reality goals… it’s happening in a number of areas. I think we will see more and more of these things, but some others will be lagging. But in terms of VR, I don’t think this is going to be the mainstream in the next two years in this region.”
“I’m not a saying it’s not happening; I’m saying that it will not be the focus for the region, though I think AR will be very useful for specific businesses and will have a high adoption. If you’re going to buy a new piece of furniture, you take a picture with your phone and you understand how your new piece of furniture will fit in your house. But is this going to be the transformation at a country level for businesses? I don’t think so. We need to meet the basics first.”
“We do engage with Dubai’s smart city officials on a regular basis, as well as those in different countries. We don’t disclose what the conversations are. We think it’s up to governments to tell the story of what they want to achieve. Centrally, as Alphabet, not as Google, we created a company called Sidewalk Labs specifically to think about the design of cities, so there’s a lot of expertise that we could try to leverage in this region.”
“I don’t see it as being particular to this region. I think the scope will be much more global. We take this extremely seriously and I hope you have noticed that there is no specific initiative that goes on here. Obviously the complexity of the Arabic language means that we need to make sure that we cover that base as well.”
Top ten 2017 searches in UAE
1. Indian Premier League 2017
2. iPhone 8
6. Louvre Abu Dhabi
9. Fidget Spinners
10. VAT in the UAE
YouTube success story
- The MENA is in the top five countries globally in terms of total watch time.
- YouTube today has the highest reach amongst millennials (97 percent in UAE and 95 percent in KSA)
- More than 85 percent of millennials visit YouTube at least once a day.
- YouTube is redefining Arabic entertainment and is home to hundreds of thousands of hours of local original content as well as traditional broadcast content extremely popular during Ramadan.
Mapping the region
Google has mapped seven Arab cities using Street View (Dubai, Sharjah, Ajman, Fujairah, Ras Al Khaimah, Umm Al Quwain and Tunis) and has 20 special collections, including Burj Khalifa, Sheikh Zayed Grand Mosque, Liwa, Giza Pyramids and Petra.