About 15 years ago, you were lucky to get a 19.2 kbps connection to the Internet. Today, we are starting one gigabyte per second trials. Where this technology should lead us, hopefully, is when devices can connect to anything at any point of time. All information, images and pictures are in the cloud and not actually on your PC. Which means you don't need as much computing power on your computer, rather, a device that can connect very quickly to a cloud that exists wherever you go. The world is going towards the network computing model. Any unconnected device is becoming less interesting.
This is all going to happen in the next five-toeight years. And such technology is changing the shape of every business. The way to think about the Internet is that it provides a new way of consumption, people can consume things differently and it provides a new way of distribution. The music industry has a new distribution model. You don't have to physically walk to a music store if you can choose to download digital music. The production model has changed.
The same thing will happen to different industries in different shapes, ways and forms. It will change the way politics is conducted. Many politicians actually had Facebook managers and now President Obama takes questions from YouTube, which means technology now has the ability to give you instant feedback. Every business is trying to get consumers to come on their websites and spend a lot of time. That turns into advertising and the ability to sell products. Google is the only website where we are trying to get people away from our website as quickly as possible. To do that, we have to spend even more money trying to put out more data centres to try satisfy this need of more and more consumers seeking instant gratification.
Our founder has an interesting philosophy: "Waste what is in abundance, to optimise what is scarce." The idea works for technology. Storage and computing power is getting cheaper every day. We are turning into an open resource work. People are going to be able to write applications which need to work in as many devices as possible. What's interesting is, devices are becoming very powerful and nobody knows the answer (to which device will become most popular). There will be some combination of devices and each of us will choose a preference. If we like music and we like our phone, we will carry a device that has both of these. Device confluence is going to happen but it will depend on how each of us chooses to use that combination.
Video is the next big thing. The general feeling Internet users have with any video content, is that they can find it online on YouTube. I think YouTube is getting to the same point as Google. People upload 20 hours of videos every minute. It might take longer than 600 years to watch all the videos on YouTube— and people will be uploading while you are watching.
In the next five-to-eight years, about 30 to 50 per cent of the content in the world will be consumed digitally. That's a big shift. If you look at the world, it's a $700-billion advertising industry; if you add below-the-line marketing, it's about a trillion dollars. If 50 per cent of the content is going to be consumed digitally, I'm hoping some proportion of the trillion dollars moves to digital.
But will people pay for content on the Internet? Let's ask instead: what do people pay for? They pay for the content but they also pay for the experience of a brand. The fact that it is packaged and distributed a certain way, the fact that it has an ethos. The same will happen on the Internet, there will be content that is fully-driven by advertising. And there will be subscription, but it will have a balance. So many people will pay for it and many won't. Over time I feel the traditional media curve will be replicated online as well but there could well be different players.
The social networking business has figured out how to get 400 million people to log in three to five times a day. People in India spend an average two-and-a-half hours on social media a day. That's phenomenal. I don't know how that translates to what's going to happen, but I think over time what's going to happen is this community-centric approach of consumerists will actually reverse and bring content into it as opposed to content being a centre of this community. It's fascinating to watch how people like Bollywood stars are beginning to do their own brand management on the Internet.
Companies are managing their brand using the Internet. In the past people were put in a room and asked questions in the name of market research. Today, you can do research on the Web. Each day we do a hundred Google experiments, where we take 1 per cent of the population of Google searches and try to do something different with that. One per cent in a day ends up being about 20-30 million searches a day. We have done hundreds of these. If you are launching a brand or a consumer product, you can look up Facebook and Twitter for feedback and incorporate that into your market research way before your branding and customer service surveys.
In fact, you can build brands on Internet. Like the UK university student who recorded a video of herself singing a song each day for about three months and ended up having a million followers on YouTube and got signed by a record label for a million dollars.
There are over a billion or more people over the globe connected to the Internet and their behaviour is changing with greater Internet access. We are turning into an information-on-demand society. We expect answers right way. And it goes from exploration to satisfaction to trust. It goes from I can find stuff on Google, to total reliance.
— Nikesh Arora, President, Global Sales, Google
(Based on Arora's speech at the Conclave and an exclusive interview with BT)