Alphabet
’s
GOOGL
division Google is leaving no stone unturned to bolster its presence in India on the back of its strategic investments.
This is evident from its latest investment in an India-based social media and networking platform, ShareChat. Notably, Google, along with Times Group and Temasek Holdings, invested $300 million in Mohalla Tech, the parent firm of ShareChat, offering a valuation of $5 billion.
The latest move proves that Google has been eyeing the short video app market in India.
We note that ShareChat’s monthly active user number stands at 180 million at present. Also, the combined user base of Mohalla’s subsidiaries Moj and the recently acquired MX TakaTak stands at 300 million.
Growth Prospects
We believe that the strong user base and the growing popularity of the above-mentioned platforms will aid Google in gaining a solid footprint in the booming short video market of the country.
The search giant’s investment in Josh, which is a close competitor of Moj, remains noteworthy.
Notably, the underlined market is proliferating on the back of increasing consumption of short video content, as well as rising advertising spending.
Increasing Internet user penetration and strengthening content creation velocity are continuously driving growth in this market.
Per Bain & Company data, the user base in India’s short video market is expected to reach 650 million by 2025.
Reportedly, more than 50 million Indians use short video apps at present. Further, several companies utilize these apps as their marketing tools.
Bottom Line
Google’s latest move bodes well for its continued focus on bolstering its presence in India, where digitization has reached a much-advanced level. Further, it reflects Google’s growing interest in the emerging markets of the country.
Strategic investments of the company have been shaping its growth trajectory in the country.
Apart from the investment in the short video app market, Google’s investment in the telecom market of India has been strengthening its relationships with telecom operators.
The growing proliferation of the company’s Wi-Fi service at Indian railway stations and the solid adoption of its Google Cloud platform remain major positives.
We believe that all these endeavors will aid Google’s parent Alphabet to reap benefits from the second-largest Internet market, India.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider some better-ranked stocks like
Avnet
AVT
,
Monolithic Power Systems
MPWR
and
MaxLinear
MXL
. While Avnet and Monolithic Power Systems currently sport a Zacks Rank #1 (Strong Buy), MaxLinear carries a Zacks Rank #2 (Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Avnet has gained 7.5% in the past year. The long-term earnings growth rate for AVT is currently projected at 37.2%.
Monolithic Power Systems has gained 30.4% in the past year. The long-term earnings growth rate for MPWR is currently projected at 25%.
MaxLinear has rallied 1.3% in the past year. The long-term earnings growth rate for MXL is currently projected at 20%.
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