Google to Open Indonesia Office By End of the Year
& Shirley Christie
Internet giant Google is planning to expand its presence in Indonesia,
starting with the opening of an office here this year, officials said on
Yopie Hidayat, the vice presidential spokesman, said the business would be similar to what Google did in China, where it helped connect small- and medium-sized enterprises to buyers in the rest of the world.
“They came to meet the vice president. They said they would open an office here and ideally it would be before 2012,” Yopie told reporters after Vice President Boedino’s meeting with Google chief Eric Schmidt.
In characteristic Google style, Schmidt arrived at the Vice Presidential Palace on Friday morning in a taxi, albeit a relatively fancy Silver Bird Toyota Alphard. He flew to Bali later in the day for the Asean Regional Entrepreneurship Summit.
According to Yopie, the investment would involve setting up a network with local companies that would benefit from the trading efficiency provided by digital connectivity.
Schmidt declined to elaborate on the details of what business Google was specifically interested in expanding in Indonesia, saying only that negotiations with the government were ongoing.
But he noted the rapid development of SMEs in Indonesia’s growing economy. “There are 50 million small businesses in Indonesia, just numerically those will be the engine of growth for the future economy,” Schmidt said.
He also said the increasing Internet and mobile penetration in Southeast Asia’s largest economy, along with the high use of its search engine, made Indonesia interesting to Google.
Schmidt also said he saw an opportunity in the problems posed by the country’s large and scattered land area. “The best way to solve the isolation of the islands is to get them connected to the Internet,” he said.
The focus on SMEs, according to Tifatul Sembiring, the communications and information technology minister, is in response to a request by the government. “We will help market SMEs, and in addition there will be cooperation in the software sector and computer security such us to help us track cybercrimes,” he said. Tifatul added that the government would ensure an efficient permit process for Google.
Gatot Dewa Broto, a Communications Ministry spokesman, said Google was now in the process of getting an investment license from Indonesia’s Investment Coordinating Board (BKPM).
“The Google team has said they are seriously interested in investing in Indonesia,” he said. Gatot added that the company first approached the ministry two months ago. “Their plan is to open as early as October,” he said.
Andi S. Boediman, a partner at Ideosource, an incubator and venture capital firm for digital businesses, said Google was likely to target SMEs through AdSense and AdWords
“AdSense and AdWords basically work like classified ads,” he said. The two advertising businesses were Google’s main source of revenue, which hit $28 billion last year. “The market for these two services is huge. About 80 percent of Google revenue is contributed by them,” he said.