Why it makes sense for Google to takeover a local search engine

 Goutam Das   New Delhi     Last Updated: November 10, 2017  | 22:06 IST
Why it makes sense for Google to takeover a local search engine

Local search engine and listings company Just Dial's stock closed 9 per cent higher on Friday at Rs 500.30, after hitting an intra-day high of Rs 549.85 on the BSE. The spike resulted from a newspaper report that said Google was in take over talks. Just  Dial, in a clarification to BSE, has denied any such development.

"As mentioned during our previous media, investor and analyst interactions, Just Dial, as part of its regular business, does meet various relevant corporates for exploring any business/strategic opportunities and tie-ups. However, we would like to clarify that as of now there is no proposal in respect of acquisition of business of Just Dial by Google and news published in Business Standard dated November 10, 2017, is factually incorrect," the company said.

While the report could be wrong, it makes sense for Google to buy a company with greater depth in local searches as well as transaction capability in India. The way Indians search for information online has undergone a paradigm shift with the mushrooming of smart phones and the app economy. While Google is the king of all of overall searches, Indian start-ups with great apps are nibbling away at Google. For instance, restaurants. A few years ago, Google could have been the defacto search engine to look up food joints. Now, it is Zomato, EazyDiner, and a host of other companies. In local home services, there are companies such as Housejoy that aggregates everyone from beauticians to plumbers. For buying products online, there are marketplaces such as Amazon and Flipkart. For airlines tickets, there is MakeMyTrip and Yatra. There is a BookMyShow for film and events ticketing. And if its hotels, you could fire up OYO's app. These companies are also end-to-end transactions platform, besides being a listings and discovery platform.  Google should be worried.

Just Dial is a local search engine with fair depth in many verticals - the company provides deals; one can shop online, book flight and movie tickets, hotels, buses and cabs. One can order food as well. Just Dial today has a database of nearly 20 million listings. Its September quarter results underline a strong operational performance - it reported a 27 per cent rise in standalone net profit at Rs 37.5 crore over the year-ago period on revenues of Rs 194 crore.

Google could gain from the acquisition of a company that is operationally sound, profitable, and with depth in local listings.

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