Shaky Start To 2012 Disguises Google’s Progress In Africa

VENTURES AFRICA – 2012 did not get off to a good start for Google in Africa, with the company forced to fire its country manager in the wake of a data-poaching scandal involving Mocality, Kenya’s largest business directory. Mocality had accused Google of fraudulently using its data in order to sell competing products to clients, and after an investigation the company apologised and terminated the contract of country boss Olga Arara-Kimani.

Google’s Vice-President for Europe, the Middle East and Africa, Nelson Mattos declared himself to be “mortified” and unreservedly apologised to Mocality. “We’ve concluded our investigation into the serious allegations about our use of data from Mocality’s website in Kenya,” he said. “We’re very sorry this happened. We’ve taken appropriate action with the people involved and made changes in our operations to ensure this doesn’t occur again.”

The scandal had gone public on 13 January, when Mocality CEO Stefan Magdalinski accused Google in a blog post of unethical business practices. Since October last year, he said, Google had been “systematically accessing Mocality’s database and attempting to sell their competing product to our business owners. They have been telling untruths about their relationship with us, and about our business practices, in order to do so.”

Mocality stumbled upon the anti-competitive practice after receiving numerous phone calls from businesses listed on its database regarding a website design service they were apparently offering in partnership with Google. Mocality do not offer web design or domain hosting services and has never had a joint venture with Google. The company thus launched its own investigation, discovering that a team of people using Google IP addresses had been accessing contact details of Kenyan businesses and approaching them offering their own domain name for a small free under a joint venture between Mocality and Google.

It was not an auspicious start to a year in which Google had intended to go even bigger in Kenya, a potential growth market for the major players in the technology sector. It seemed that Google had overplayed its hand in looking to tap into the local market.

Yet this one scandal does not tell the whole picture, which is one of Google making tentative steps into the Kenyan market with a handful of different offerings and investments. The play is a slow and measured one, but suggests that the company is prepared to redeem itself after the Mocality trauma and make a real dent in the Kenyan sector. This push began last October, when the company launched Google Trader, its online marketplace, in Kenya. The launch of the free classifieds service, that be used by anybody but is expected to have the biggest uptake in major towns and cities, came just days after Google-owned YouTube was given its own localised domain.

Then, in March, Google moved to invest in Kenya’s tech development, announcing 28 million shillings ($332,000) worth of funding will be provided to the iHub, Nairobi’s tech innovation hub, and the Kenya Education Network (KENET), to boost two of Kenya’s primary independent internet communities. The iHub will use the funding to expand its infrastructure, while KENET said it would continue to “connect educational institutions with a private, affordable high speed Internet.”

“We have been partners with Google for about the last two years,” said Erik Hersman, co-founder of the iHub. “This is just an extension of that, filling niches that the community needs. One of Google’s big drives is to increase the uptake of internet in Kenya.”

The company has also moved to introduce technology that will help users of public transport in Kenya’s bustling capital. In May it launched near field communication technology-enabled Beba cards on Nairobi’s Citi Hoppa buses, allowing passengers to pay for their bus fares with their topped-up cards and avoid price hikes. Passengers can tap the card on a reader to initiate the transaction, having put money on the card before use. Though Google is merely trialling the NFC-based product on the Citi Hoppa buses, given the unpredictability of the African market, it plans to roll out the payment method should the pilot prove successful. This would see Beba cards used in supermarkets and other retail outlets. The cards, which can be loaded with up to Sh10,000, should spare Nairobi bus passengers the daily inconvenience of bus fares that rise and fall, unauthorised, depending on the conductor’s mood or the volume of passengers.

January’s scandal apart, Google is certainly establishing a creeping presence in the Kenyan market, indicative perhaps of a desire to take full advantage of all the tech opportunities the burgeoning hub has to offer. The company says it is not yet in the market for revenues, but is instead pursuing market development that would allow their advertising revenue schemes to flourish. Google is pushing for a larger uptake of the internet in Kenya, and hopes that by funding the iHub andKENET it both helps Kenyans develop local content and further integrates technology into research and learning. By strengthening the developing and academic communities in Kenya Google is seeking to increase access to the internet and spur relevant local content. It may not yet be making money, but chances are it soon will do.

Image via gossiptongue