Alphabet Inc , has stopped giving out handouts to Google and the other subsidiaries it owns, and now they must grow their businesses as stand-alone firms. Google is taking the lead among all the parts of Alphabet and the firm is looking to emerging markets in order to step into a new phase of growth. The Wall Street Journal reports that Google CEO, Sundar Pichai will make his first official visit to India since he became the CEO.
The old Google restructured its business in August to become a parent firm named Alphabet Inc. Alphabet has a number of subsidiary firms that include Google Auto, Calico, Life Sciences, Nest, and Google among others. Google as a subsidiary of Alphabet controls Search, Gmail, YouTube and Chrome. Google has grown to become a key player in the global tech space but its influence is most felt in the developed countries of Europe and the Americas.
Alphabet’s Google has its sight on India
Alphabet Inc ‘s Google has almost maxed out its growth in developed markets because internet penetration is high. However, the firm must find ways to grow in order to increase its revenue and in order to stay relevant in the grand scheme of things in the tech space. The emerging markets of Asia and Africa provide a huge opportunity for the firm to unlock growth because of the low level of internet usage in those markets.
Billions of people are not yet connected to the Internet and most of them live in Asia and Africa. India is a sweet spot for Google because it has more than 1.2B people who are keen to get online as they find it much easier to access the Internet. China would have been another great market for Google, but the firm left the country in 2010 after it had issues with Beijing. Now, Google’s CEO, who grew up in the India, would be heading back home to jumpstart growth for the firm.
India is already a viable market for Google as Indians embrace Google services. The firm posted net income of $3.98B in the third quarter up from $2.74B in Q3 2014. The firm doesn’t post revenue by countries but Wall Street Journal’s VCCircle subsidiary reports that “Google India Pvt. said it had sales of 30.51 billion rupees ($454 million) in the year ended in March 2014… more than three times its sales from three years earlier.”
Change to Alphabet not good for its India staff
The corporate restructuring that gave birth to Alphabet Inc might be good for the firm but it might be bad news for the firm’s Indian workers. The Times of India reports that Google staff holding Employee Stock Options might have to pay capital gain tax as per Indian tax laws. The ESOPs can be taxed at 20% with interest if they’ve been held for more than 3 years. They’ll be taxed at the slab rate if they’ve not been held for up to one year.