Google goes to Argentina

THE TALK of the weekend down here was the opening of Google's regional HQ in Buenos Aires city. Some facts are finally emerging from the hype.

A decade ago, Argentina was one of the most expensive countries, due to an economic illusion which pegged the local currency to the American greenback, generating deflation, an influx of cheap imports, and loss of jobs. Nowadays, heavyweights like Motorola, Intel, EDS, and BT among others have not only returned, but made big investments in the land formerly known for tango music and beef.

Google is the last to join this wave, and its choice of Buenos Aires -Argentina's biggest city- for its headquarters was an obvious one: it's got the best bandwidth in the country and the highest number of ISPs and telecomms providers, plus the biggest pool of talented people -despite some exceptions like this scribbler-. Unlike Intel and Motorola which settled on Cordoba to have fresh batches of programmers straight from local universities, Google wants initially to focus on Adwords and AdSense, and "BA City" is where business activity is at.

The new Google office in Buenos Aires will act as the "regional hub" for the online advertising giant -which also operates a search engine on the side-, managing not only Latin America but also providing some services to the Spain market. This local HQ is headed by Gonzalo Alonso, who until last week was general manager at Google Mexico.

Three years ago, the firm opened offices in Mexico and Brazil, and the rest of the countries only had distributors of the firm corporate products and Intranet appliances. Before this move, the firm only had regional headquarters in the U.S. and Ireland, and company execs said the new Buenos Aires regional HQ will be comparable in size to those.

Mr. Alonso made two interesting comments. First, he mentioned Yahoo as its main competitor, not Microsoft. Second, he basically said that Argentina is a "Google Country", citing some surprising figures about the firm's search engine market share and mind share. He said that in this country "72 per cent of users choose the Net as the primary source to do information research, and of that 72 per cent, over 80 per cent chooses Google as the search engine". Google Argentina's offices will be located in the stylish Puerto Madero district, and Alonso said the company plans to employ up to 1,000 professionals at its local operation, with up to 2,000 additional "direct and indirect jobs" in the mid term.

The new head of Google Argentina explained the company wants to promote Adwords and that while the price of keyword sales is still very low the firm needs to "understand the users, and for that you must be a local player". He touted Adwords as a "big opportunity" for small and medium sized business, and said the firm also wants to promote its Adsense offering in the region. About the outsourcing of some of the Spain services to Argentina, Alonso said it's "very relevant that such a developed market as Spain gives us the responsibility of its customers, something never done before at Google".

Eric Schmidt, Google's CEO visited the country and met with the country's vice president, Daniel Scioli. He said the firm's move into Latin America will be a key towards e-commerce as broadband usage is "set to explode" in the region, and noted that Latin America is "the region with fastest growth in the Internet sector, more than Asia, the U.S. and Europe"

Google's Alonso said Argentina "has taken the right financial decisions" and is recovering from the 2001 crisis. He added that the country leads in the region in terms of human resources and software and IT development, along with the growth of both internet usage and online marketing spending.

Last year, the Chilean press pressed Mr. Alonso about whether Google would choose Chile as its regional headquarters, but he proceeded to sidestep the question, saying that "buying a building and setting up a big sign is not what's important". How things change with time. In hindsight, it seems evident by now that Argentina was along with Chile several of the firm's options when choosing a location for its HQ, and that the decision wasn't made at the time. Or perhaps he didn't want to create any bad feelings in Chile, for decades the darling of the foreign investment in the region.

Now as head of Google Argentina's regional HQ, he said the firm "has very good relations with the Argentine government, and its support was sustained and key to our decision to enter the country and bring this investment". Strangely, not one but three university professors and economic researchers asked by the often government-hostile press agreed and said the local economic policy and the macroeconomic outlook for the country have set "the right conditions" for stability and continuous growth of investments like Google's.

All that is good news, but I am personally outraged because the INQ was not invited to picture the new HQ.µ

See also:
Argentina ends 2006 with record-breaking e-figures
Intel creates new software R+D unit in Argentina
Intel to create software development centre in Argentina
TelMex billionaire grabs WiMAX operation in Argentina

L'INQs
Buenos Aires city in pictures
Firms flock to Argentina's Silicon Valley
India faces challenge from South America
Argentina, more near-shore than offshore
Doing it their own way

The Economic Illusion
News sources: AE, DiarioHoy, Clarin, InfoBAE, eBlog (all Spanish links)