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Google reaches out to the "next billion"

The Google logo is seen as Google Executive Chairman Eric Schmidt speaks at a promotional event for the Nexus 7 tablet in Seoul September 27
The Google logo is seen as Google Executive Chairman Eric Schmidt speaks at a promotional event for the Nexus 7 tablet in Seoul September 27

By Jeremy Wagstaff

SINGAPORE (Reuters) - Google launched a service on Thursday it hopes will push millions of people in the developing world to access the Internet - and Google's ads - via basic mobile phones.

Google is launching the service, called Free Zone, first in the Philippines via local carrier Globe Telecom. The service allows phones with an Internet connection but limited functionality to access basic Google products like search, email and its social networking service Google+ for free.

Users could access websites that show up in Google's search results for free, but any website outside those results would prompt an invitation to subscribe to the mobile operator's data plan.

"It's aimed at the next billion users of the Internet, many of whom will be in emerging markets and encounter the Internet first on a mobile phone, without ever owning a PC," AbdelKarim Mardini, product manager for Google, told Reuters.

Google and Globe hope that by offering a free layer of services they will entice users of so-called feature phones to move beyond just making phone calls and sending SMS messages to sign up for Internet services.

Such services are more lucrative for carriers. Google makes most of its money through ads on web pages. It says it plans to roll out the service in other countries soon.

While developing countries like the Philippines have been enthusiastic early adopters of cellphones, there are still millions who either use phones too basic to be used for Internet services, or who are reluctant to shell out for more expensive services.

Phones running Google's Android operating system now account for three quarters of all smartphones shipped, according to consultancy IDC. But that still leaves a lot of phones.

The GfK Group, a research company which measures consumer habits, reported in September that while smartphone sales are growing rapidly in Southeast Asia, the more basic feature phones still outnumber their more expensive counterparts.

The Philippines, for example, saw a three-fold growth of smartphones in the 12 months up to September, but despite boosting their share, such devices still accounted for only 24 percent of all mobile phones.

Globe and Google are not the only players in the Philippines to target non-smartphone users by offering them a cheaper way to access Internet services.

Since launching a pared down Internet service last year, for example, Globe rival Smart Communications said the half million users who signed up spent 150 percent more on average per month than its other subscribers.

(Editing by Robert Birsel)

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