Google in Hungary and search as such

How is SEM developing in Hungary?

Some of Google’s steps and challenges in emerging markets: Hungary

Posted by Annplugged on September 15, 2006

Search activities as well as search engine marketing is gaining impetus day bRocketsy day in Hungary in line with the international trends. It is rocketing in the US, and we seem to be before a major boom again. If search, Google is an obvious association, but not autmatically in the Eastern and Central part of Europe. In Hungary it is spreading. But how exactly Google Inc. is finding its way in the Hungarian market within the broader context of Central/ Eastern European context? I turned the person in charge, Dennis Woodside. And there you go: he was ready to answer, and even send his official photo. :)

Dennis WoodsideThe interview with Dennis Woodside, Director of Emerging Markets, EMEA (responsible for the entry to the China, Brazil and Mexico Markets, as well as for the Israel, Turkey, Poland operations launches, entry to the Russian market and the EMEA strategy & operations) was made on 13 September 2006. I hope you will find some useful information on how regional developments are going on. Feel free to comment and share your insights.

 

Anna: Google Inc. registered its Hungarian subsidiary in October last year. Does it mean that the Hungarian market, just like the Czech , Slovakian , Polish , Portuguese markets, is considered more and more mature for search engine marketing?

Dennis: The market is growing, and it is becoming interesting to us. The search traffic from Hungary has been increasing significantly, even though we did not have a domain (note: google.hu was squatted by a Hungarian firm, so Google search was only available through google.co.hu). More and more people are online: our statistics shows about 3-4 million users out of which half a million has a broadband connection. Obviously our mission is to make information available universally, and we take that mission seriously from the early days. Google’s aspirations were from the beginning to launch products and services in multiple languages, which can be done on the internet, even if you don’t have a lot of people (laughs). This means that years ago, maybe in 2001, when Google was rather small, our search service was accessible in the Hungarian language. People in Hungary use it because it is relevant, fast and brings good results in Hungarian as well as in other languages. So, yes, the Hungarian market is very interesting to us. The first step was to get back the Google domain in Hungary. People go to the URL bar and type in google.hu, and they expect to see Google, so the first thing we needed to fix was the domain and we are launching google.hu these days (note: already running)

Is there a growth in AdWords advertising parallelly with the increase in search traffic, too?

In every market where we have the advertising platform we’ve seen significant growth regarding advertising revenue alongside the search revenue. The markets are growing and Hungary is no exception.

If the volume of demand gets bigger, can we also count on the foundation of a major Center for AdWords in Europe like you are setting up in Ann Arbor in the US?

We don’t have any plans at the time, there’s nothing new that I would have to say on that.

What would you say are the biggest HR challenges in recruiting Hungarian, and in general, ex-soviet block country employees? Are the expectations regarding skills too high?

(note: e.g. the requirements for the position of Hungarian Country Consultant sound tough: “5 to 10 years experience in a line management role, like general management, sales, marketing, business development, for a high growth technology firm /entrepreneurial endeavor” considering that ‘entrepreneurial endeavor’ in itself is relatively young in Hungary, slowly developing since 1989, the year of transition)

Interesting question. Let me just tell you a kind of a story. A year ago we had no offices east of Berlin. We had nobody in the market but we had Russian, Czech, Hungarian search, and all the rest. The company realized that we need to solve that problem because when you have an office locally, you are closer to the market, so you understand what is going on. So having products that are suited for that market, and translations at a very good quality, we started recruiting. The first challenge was that people who were very good did not think Google was serious about the market, because we did not have anybody in the market in many places. I think we have brought up the track record in Poland, in Israel, in Turkey, so will we do in Hungary. Now people can look at other countries and see that we are serious, and we have done quite a bit in a short time in those countries. So that was the first challenge, and then, the second challenge is that often people have seen other non-local, American, and Western companies come in, invest and then pull out of the market. That particularly happened in the internet, but it happened in technology quite a bit, so that can be a concern. Needless to say, overcoming those concerns are really the biggest challenges.

But there are talents in the region, there are a number of entrepreneurs in all these places: if you go to Poland, there is a very robust e-commerce market, there’s a local website, auction platform that attracts more visitors than eBay in Polish. So there are very entrepreneurial, innovative companies in all these places and the internet fosters that kind of creativity. Entrepreneurial spirit has typically not been a problem.

Are there any plans to have a stronger presence in Hungary in the years to come: i.e. in addition to setting up servers in a storage room, can we expect to have more serious offices like a separate sales department, an RD center or an engineering center in Hungary in the near future?

Well, I don’t want to talk about that for competitive reasons, but the first step is to have the domain so that we can serve our users. After that, we will see what happens with the traffic. Another step is to hire the Country Consultant, whose responsibility is to help educate us on the market and also on what the opportunities are, and how we should approach that market, what strategies we should use. We will look to other examples. For instance, when we started in Poland, we thought that there was a pretty large opportunity from the beginning: our hypothesis was confirmed. It turned out that there is a large opportunity there, and the office is doing quite well. Similarly, Egypt is a country where we have seen opportunities, so we hired a Country Consultant because we did not know how to approach the market, and that person spent three months with us helping us to develop a strategy, and is now the Country Manager for Egypt, and we are opening up an office, and hiring people over there. So what is driving the business strategy in the market, I think it depends on what happens over the next little while.

Do you think that through the Country Consultant in charge of giving an overview of the Hungarian market, Google will initiate a dialog with the market players concerned? Are they welcoming to share experiences, insights about the Hungarian search engine market, search technology, and if so, in what form?

I don’t want to go into specifics on what the person is going to do. We will get the person on board, and he/she is to help us on what we are going to do in the market from a business aspect.

So I mean, are you going to use market researches or actually talk to stakeholders in the market?

I do not know. First we hire the person, and then we will figure out what we are going to do.

And when you moved into other countries, did you engage in a public dialog? For example in Poland

Yeah, in Poland we have a country manager with a team. In the last six months or so they started talking to advertisers and partners as well as developing business partnerships locally.

Talking of Poland, and about the rumors that the next center in Europe will be in Poland, if Google Inc. is to choose the next centre, what would matter more: the favorable geographical location, or rather it is dependent upon the market size?

This question is better suited for the technology teams, rather than the business teams where I work, but I can answer you generally: our approach is to go and find good engineers around the world, and some of them may choose to join an existing centre, so we have an engineering centre in Zurich, and also in London. And in some cases we may wish to open a centre, so we are looking for talents wherever they might be. For instance, we also have a centre in Moscow.

So it is rather up to the location of talents than the geographical location

Well, it is a little bit of both. But it is not necessarily the market size that is decisive for us. Israel, for example, is not a large market, but there are very talented engineers there, so we have a site director in Israel, who is building a team at the moment.

And that was the end of the interview… be back when developments are coming. At least Dennis promised to be available… :)

Final note: as you can see there is a lot up to the Hungarian Country Consultant, and his/her perspectives on the market. We hope the best, and wish her/him good luck in a growing interactive landscape with growing entrepreneurial spirit.

PS: By the way, I hope there have been more and more Hungarian programmers applying for the annual competition, so that we can prove our talent here and attract more attention from Google strategists.

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15 Responses to “Some of Google’s steps and challenges in emerging markets: Hungary”

  1. So, we tried to get in contact with Google via mail, fax, email about the stakeholders of the Hungarian market but got no reply in 4-6 weeks…

    To find out whom they should cooperate with in Hungary, all Google needs to do is to check their own Adwords system to see which Hungarian companies spend a considerable amount quarterly (let’s say, 10 million HUF, ie. 50 000 USD) or achieved the Google Adwords Professional status.

    Why should the small Hungarian market matter at all to the 800lb gorilla Google is? Well, despite Google almost totally ignored the market, there is stil a huge market share of it. With a little attention, they could grab almost all (hint: they could start with correcting the interface translation).

    In the interview, we asked whether the expectations for the regarding skills are too high. The answer was not too direct but very optimistic. However in Hungary, the social capital is extremely important, it always was and still is, to extreme levels – often it goes as far as corruption. There was a novel written about this in 1932 and recently, the Academy Award winner director, Istvan Szabo adapted the novel to the big screen. Plus ça change, plus c’est la même chose. (The more things change, the more they remain the same.)

    How this relates to Google? We also have our connections (thank God, we are not in a position to became corrupt :) ) and it would be very surprising if they would be able to find such a local talent. Now, if they bring in someone from abroad, (s)he will have no chance to understand the peculiarities of how the Hungarian market works. Or if they bring in a marketing guru from another market segment then (s)he won’t understand the philosophy of the Internet search market.

    So to sum up, we wish that Google would lower their expectations and find the relevant players as suggested above and ask them to be the judge. Or, what about googling for “keresőmarketing”?

  2. P.S. No, to clarify the situation I don’t want to be the Country Consultant much rather I would like her/him to be a person I am able to have good business with.

  3. gugli said

    Laszlo, thank you for the insightful comments indeed.

    Well I hope you will get reply, as Google teams are many times very helpful.

    As for checking the AdWords system, I think it sounds very sensible to use the client data a, either as an input before choosing the Country Consultant, b, or afterwards: as a sort of help for the chosen Consultant, i.e. who (s)he may wish to talk to about market specific experiences (which must differ from country to country)

    “Why should the small Hungarian market matter at all to the 800lb gorilla Google is?”
    I think this question could suggest a contemptuous approach, and I am glad to disagree at this point. Taking into consideration that search in Hungarian (and in other relatively small languages) has been available for more than 5 years, it seems unlikely that they only focus on OECD languages: I think smaller markets do matter to Google, and this trend is on the increase now that they are building out the right business infrastructure and facilities for/in emerging markets.

    Unfortunately, I must agree with you concerning the importance of social network, and having good connections in Hungary, which many times create tightly knit interest groups not only in business, but in scientific circles too (see current scandal with the Hungarian Academy, and Csaba Szabó). Hopefully, stiff and rigid structures characterizing post-socialist Hungary will change, and Google will find the right person, who is talented enough to overcome more sophisticated, deep-rooted obstacles and bring out the best of the market.

    Anna Sebestyén

  4. [...] Az interjú Dennis Woodside-dal, a Fejlődő Piacokért felelős Igazgatóval 2006. szeptember 13-án készült. Dennis Woodside vezette a Google belépését kínai, brazil, orosz és mexikói piacokra (amelyek a The Economist magazin szerint, 2040-re a világ vezető gazdasági hatalmai közé tartoznak), valamint az ő irányításával történt a Google cég működésének beindítása az izraeli, törökországi, és lengyelországi piacokon is) . [...]

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