Google (NASDAQ:GOOG) plans to expand into Southeast Asia by acquiring technology assets in the region, taking its lead from Internet operators Tencent Holdings (HKG:0700) and LivingSocial (NASDAQ:AMZN) which have acquired companies in the market to add services and users in the region.
Google (NASDAQ:GOOG) plans to expand the world’s most-popular search engine into countries like Thailand, Malaysia, and Indonesia. While companies in those countries have historically spent significantly less on advertising, Google’s main source of revenue, than the U.S. or Europe, the presence of Tencent, China’s (NYSE:FXI) biggest Internet company by revenue, and LivingSocial, the second-largest coupon site in the world, has encouraged Google to invest more in the region.
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Internet advertising accounts for 1% to 2% of the marketing spending of companies in Southeast Asia, when excluding Singapore (NYSE:EWS), while it accounts for 27% of spending in the U.K., and about 20% in the U.S. and Australia (NYSE:EWA). Google will focus on its new social network, Google+, rather than Orkut, a social network Google introduced in 2004 with popularity in countries like India and Brazil (NYSE:EWZ), as it tries to expand its presence in Southeast Asia. Google (NASDAQ:GOOG) will also focus on developing local versions of programs like the Chrome web browser.