Google to open South African office, follows in Amazon’s footsteps

ITWeb reported that Google has finally appointed a Country Manager to setup it’s South African operations.

South African Internet usage has grown 120% in the past year, and it won’t be long until you see eBay, Yahoo & the others follow Google & Amazon’s recent foray (Amazon’s Cape Town office built EC2) into South Africa.

We have the fast growing user base (5m+), emerging middle class, 5%+ economic growth, broadband adoption growing rapidly, and SA is the gateway into Africa – over 1bn people – it’s only the logical next step. Oh, and did I mention, 30m+ mobile users!!!

I had the chance to meet with Stafford Masie today, the new Google South Africa Country Manager, and I can truly say that I was very impressed with his energy and I think that he is going to make a big difference here. I’ve read some blogs where people have stated some concerns – and this echoed the “behind the scenes” chatter within the industry – which went largely unpublished.

Prior to meeting Stafford for the first time ever today – I must admit that I was also a bit hesitant myself, as he is effectively an industry “outsider” to Search Engine Marketing and I wasn’t sure what to expect. In all honesty, if I don’t have something heartfelt to say – I’d usually just keep quiet, but I’m going to put my neck out here and say to all the naysayers, that I think you’ll be pleasantly surprised with Google’s appointment. As usual, time will tell – but he has my support and faith!

After the discussion today, I can only congratulate Google on an excellent choice in appointing Stafford!

One of the recent posts that emerged was one from Vincent Maher, that I must disagree with, was about Google discouraging entrepreneurs by entering the local market.

It’s not that South Africa is a major focus area for Google, though in the EMEA context it probably is big alongside Egypt, it’s that the impact of Google making direct and interpersonal connections with advertisers in this country might well have a significant impact on the online media industry and their margins. The fact is the local online ad industry doesn’t need a revitalisation, it has been going through one for the last two years and the entry of Google on a more serious level may have a negative impact on the local entrepreneurship we’re seeing.

Aside from that, local companies paying offshore companies for local ad-spots seems a bit like we’re a banana republic.

There are search engines in South Africa, that shall remain unnamed, that prey on the ignorance of advertisers trying to advertise online in South Africa – and that’s all I’m going to say on this point. I do believe that Google will “bring balance to the force” :-)

Google being more local will actually assist the industry in weeding out the crap that has emerged from our recent boom in online and encourage entrepreneurs to focus on building valuable businesses, that can be monetized by Google’s Adsense, which has created thousands of $ millionaires – Google earns roughly 1/3 of it’s $14bn/year in revenues via AdSense – and a large percentage of that is paid back to publishers. If anything, Google encourages entrepreneurship, like no one else in this space (maybe even as much as eBay!).

As in all countries – Google has ruffled offline media feathers by forcing them to be held accountable to their media agency’s grandiose ideas. The reality is that online usage and time spent is growing, and offline media consumption is dropping, globally. Google’s model is to make advertising efficient, and inefficient media companies are forced to either adapt or face revenue drops. This has lead to agencies like IPG being forced to diversify their business through acquisitions. You’ll soon see similar moves in South Africa, as the market moves to a more efficient marketing platform.

Vincent’s comment on the “Banana Republic” only held true up until this point. If Google reinvests those profits in developing South Africa, and Africa – then it’s certainly not just milking the local economy for profits, it’s building the industry.

My prediction is that we’re going to see a lot of world first innovations coming out of South Africa, as a result of Google taking the initiative here and showcasing both our technical talents, but more importantly, the commercial opportunities for Internet multi-nationals in South Africa!

I trust that all my (local) readers will join me in welcoming Google to Africa – thanks for joining us, finally!!

Attention Corporates …

After the many discussions this week around Facebook and with many external media references to my recent post on Corporates Blocking Facebook, it’s become quite clear that the major banks and other corporates in South Africa that are blocking Facebook because they think that it will stem the tide of social networking that is occurring over the web. Right – people are now going to stop sharing, chatting, communicating, etc – because Facebook is blocked… Wrong! They will just move elsewhere – but don’t worry – I have a solution!

I’ve decided that I’m going to help these corporates become more efficient at preventing staff from networking online by publishing a list of Social Networks to block.

I mean, why stop with Facebook, let’s just go and block every website that is a social network:

Facebook (duh!)
MySpace
Beebo
Hi5
LinkedIn
Moggl
Friendster
Orkut
MSN Spaces
Yahoo 360
Xing

If you haven’t figured out yet, most social networks such as Facebook can be accessed from pretty much any mobile phone with a browser on http://m.facebook.com – you’ll have to block that too – oh wait, sorry – you can’t as most people own their own phones! Oh well – you win some, you lose some!

In fact, why not just use this list over at Wikipedia to add to the internal corporate block list. Did you notice that LastFM was on the list – it’s Internet radio – but hey, why discriminate?! Let’s block them too! Oh, and by the time you finish with this list, just check in at TechCrunch daily for the latest networks that are springing up – just to make sure that one doesn’t slip by…

Actually, when you’re finished with that, why not block Yahoo, Google, MSN & News24 – that takes up a lot of South Africa’s time as well, based on the Alexa stats. Actually, I have a better idea – turn off Internet browsing – just allow email – it’s far more productive. Oh wait, you’re going to have to scan emails for embedded videos & other “non-work” clips, jokes, etc – and people can really sneaky about that!

The solution: Turn off the Internet – trade in the computers for Typewriters and Fax Machines (I’m happy to assist with this process on a 1 for 1 basis if anyone is keen)

Come on people!!!! Understand the medium – don’t just implement foolish, reactionary policies! The Internet is changing the way businesses operate both commercially and internally – it’s best to face the realities and be creative on how your company will adjust to this new medium.

So why are corporates blocking Facebook? It’s a distraction and results in lost productivity with certain individuals – that I will not deny! However, if work is not getting done, then reprimand individuals accordingly. If I was working in a corporate (and thank heavens that I don’t anymore), I would flip out if all of a sudden I couldn’t access Facebook, yet I dealt with every request given to me on the job. Figure out how to do proper performance management of your staff, and don’t punish the many for the indiscretions of the few!

Instead of instituting prohibition of social networks, rather focus on understanding what the web is about and ensuring that your staff understand what is expected of them – and manage appropriately.

Sigh – and now for a little bit of Facebook fun:

Entrepreneur Magazine Feature

It’s August already! I can’t believe it! Well, I thought I’d share a feature that I got from the August issue of Entrepreneur Magazine.

Page 1
Page 2
Page 3

Also, one of my latest investments from Lingham Capital (website coming soon!), SkyRove, managed to also get a two page mention, Page 1 & Page 2. Congrats to Henk, Allister and the rest of the team!

On a final note, nominations have now opened in South Africa for the IT Personality of the Year award. Start nominating your favourite IT Personalities! :-)

Corporates Blocking FaceBook

I just saw an article now on News24 about how Facebook is being blocked in the corporate world.

SA companies block Facebook

Johannesburg – South African companies are beginning to follow their international counterparts in blocking workers’ access to popular social networking site Facebook.

They cite concerns over productivity – but some experts defend the site, saying it holds huge potential as a business tool.

Standard Bank is among those who have moved to include it on its list of the company’s blocked leisure sites to prevent people spending non-productive time on non-work related issues, said bank spokesperson Erik Larson.

And, according to Absa, the banking group has done the same although it will consider access based on individual requests.

“We don’t see any business need for Absa staff to access the site,” said a spokesperson.

“Under certain circumstances we do grant permission to have access, but look at each case on merit so they are not totally cut off.”

Facebook users also report that Wesbank and a number of smaller companies are following this trend.

According to the site’s own research, its 31 million active users spend an average of 20 minutes a day interacting with their “friends”.

But, most newcomers to the phenomenon, which has at least 170 000 users on the South African network, say they are addicted and spend far more than that interacting with their “friends” locally and globally.

First of all, let me just point out how uninformed & uneducated policy makers are in most corporates, perhaps especially in South Africa, with regard to the Internet. The Internet exists, and PC’s are just once way of accessing it. There are more mobile users in South Africa (30m+) with GPRS/3G/EDGE/HSDPA Internet connections that there are PC connections (c. 4m). What are corporates going to do now, stop people from accessing Facebook on their mobile phones (http://m.facebook.com)? This is the most ridiculous thing I ever seen, and typically, these knee-jerk reactions are due to a lack of understanding of this space, more than anything else, by the corporate policy makers and IT personnel.

Also, I don’t buy the argument that Facebook is a business tool – yes, I do use it for business, but far less so than LinkedIn. It’s a social tool – but will prohibition help, probably not. Can Facebook become a business tool – yes, if adopted by the company. I had a conversation tonight with some people from incuBeta, and we discussed the fact that incuBeta has a FaceBook group, and if the correct privacy issues and security issues were put to rest (Facebook has a corporate unfriendly policy regarding uploaded content), then Facebook could replace a company’s Intranet – this is potentially something that has been overlooked by many companies. Even with the current policy, it can increase communications between staff members.

After many meetings held this week, I’m constantly amazed at the lack of depth of knowledge there is around the Internet in corporate South Africa (and after seeing a Typewriter being used by one of the secretaries of a US publication in New York a few months ago, I’m not sure if it’s just us!). Companies need to wake up and start educating their leaders as to how technological change is going to affect the workplace, and how to deal with it properly. Knee-jerk, uninformed, close-minded decisions are indicative of a species of humanity that cannot evolve!

Facebook usage in companies should be monitored on an individual basis, and those who exceed fair usage, should be reprimanded. To institute all out corporate bans points to a lack of control within a company, and probably means that the employees don’t have much work to do, or are not being monitored for performance – either of which should lead to retrenchment or dismissal. Deal with the cause of the problems, not the symptoms!

Where to from here…

Writing on this blog has been a lot of fun – and I’ve met lots of new friends and business contacts. I haven’t written much lately, mainly due to the fact that I’ve just been extremely busy. One of the things that I try to pride myself on, is writing good stuff that people want to read, not just writing for the sake of writing. Too many bloggers these days just throw a whole bunch of stuff up on the wall, to see what sticks – without much regard for focus or quality. My career focus & operational roles are changing very quickly and hence I think need to evolve what I write about.

Setting up a Venture Capital fund is never easy, but it’s a great challenge for me, and I’m learning a heck of a lot since moving on from incuBeta which was a full time role, to one as a Non-Executive Board Member & Shareholder. Running a startup (Synthasite) at the same time is even more challenging, yet fun and exciting. I’ve probably never been more focused and distracted at the same time in my life!

This all begs the question : What do I now blog about, that my readers will enjoy, given my change in roles?

I could easily cover Search, Affiliate Marketing, Online Marketing, Startups, Venture Capital, etc.

The Answer : You Decide!!

I have put up a poll, and I’m going to try and use the results as a guideline as to what I write about. I often preach that websites should be user centric – so here goes!