Google is among the few large scale Internet ventures to be profitable in the Indian market. According to its Directors’ Report, a public document filed with India’s Registrar of Companies, “Google India Private Ltd” reported revenues of Rs. 779.34 crore (around $172.03 million at current rates), over the 15 month period from Jan 2009 to March 2010. For the same period, it reported a profit after tax of 97.96 crore ($21.62 million), and received foreign exchange of Rs. 666.25 crore, with a foreign exchange outgo of Rs. 304.24 crore. Google India appears to have changed its financial year of reporting, hence we have numbers for a 15 month period instead of 12 months.
For the purpose of comparison, let’s take the per-annum average for this 15 month period: on an average, the company clocked revenues of Rs. 623.47 crore per annum, 6.22% lower than Rs. 664.85 crore reported for the previous 12 month period. There was a substantial decline in profitability, with the company reporting and average profit of Rs. 78.36 crore per annum from Jan 2009-March 2010, down 46% from Rs. 144.82 crore reported for the preceding 12 months. Remember that this was during the time of global recession. Nevertheless, compared to some of the other Internet companies in India, the performance is quite remarkable. For the same period, Info Edge (India), which owns and operates Naukri.com and other classified sites, reported revenues of Rs. 264.23 crore, and a profit of Rs. 56.92 crore. Google India’s revenues are tiny in the Google scheme of things, but substantial given the small Indian Internet market.
Now, Google’s costs should go up in the current financial year, so profitability may be impacted once again – Google India has been aggressively targeting the Small and Medium Enterprises (SME’s). At multiple times during the year, they’ve handed out introductory AdWords trial packs (ranging from Rs. 1500 to Rs. 2500 each) for businesses previously not registered with them. Just last week, Google stepped up its SME focus, and set up a new call center in Hyderabad to provide regional language support to SMEs, in Telugu, Tamil, Kannada and Malayalam. Additionally, the company announced a Google Engage program, in order to train resellers, free of cost. Google also intends to host over 100 direct engagement events and workshops for SMEs. Earlier this year, Google also launched the Google Music service in India, which should help increase advertising inventory for the company.
Please note that we’re not sure if the above results include YouTube, Admob and Orkut in India: we’ve requested Google India for an interview for more information, and will update when we have more clarity. We’re particularly keen on understanding trends in display advertising for the company in India.
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