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Top Three Europe-specific challenges for Google Inc.

Posted by annplugged on May 15, 2007

So what does Nikesh Arora, who manages and develops Google’s operations in the European market, consider as the top 3 challenges for Google in Europe (vs. Google US). Nikesh Arora Google Europe VP at Budapest press conference

This morning started with a press event in the Four Seasons Hotel in Budapest (great place, great food, no wifi).

The intended focus of the press event was to officially announce the strategic co-operation between Google and the Hungarian market leader T-Mobile and T-Online (using Google search results as part of Google syndicate, content network expansion through the search page called ok.hu).
As the news got around the blogosphere days before the official announcement, I was more interested in what Nikesh thinks about the major differences between Google US and Google EU. The top three should not come as a surprise:

No. 1 Europe is multicultural, multilingual so there is no general solution for the EU as a unit.
No. 2 In the last two years businesses have become more internet savvy. Yet, European businesses do not value the internet as much as their American counterparts. Mind you, it is not the users who would undervalue the power of the web, but rather enterprises in Europe.
No. 3 In Europe it is more challenging to find good people who have a high capital of risk tolerance.

I definitely agree with all three, although my general impression is that enterprises, sadly many times with excellent ideas, simply lack entrepreneurial skills, including calculating the value of web presence and the money available for risks. Moreover, they may not go and look for professionals who possess such skills. Nevertheless, I do hope that things are changing faster than expected, especially regarding the latter two challenges as they can be improved, unlike EU multilingua (multilingualism is a hard nut to crack, harte Nusse, kemény dió etc.).

To test risk tolerance, i.e. how much risk your investment can handle, here are two main questions to ask yourself (from investopedia through forbes) if you have not done so far:

  • How much time do I have? “Before you make any investment, you should always determine the amount of time you have to keep your money invested. With a longer time horizon (young), investors have more time to recoup any possible losses and are therefore theoretically be more tolerant of higher risks” So, it seems that the old continent is old in this respect. European businesses with a longer time horizon are less willing to tolerate risks at higher levels for higher potential yields. Playing safe.
  • How much can I lose? “Determining the amount of money you can stand to lose – i.e. risk capital – is another important factor of figuring out your risk tolerance. By investing only money that you can afford to lose or afford to have tied up for some period of time, you won’t be pressured to sell off any investments because of panic or liquidity issues. The more money you have, the more risk you are able to take and vice versa.” Again, European companies appear to draw the line tighter – saying they cannot afford to lose ‘that much’ – in all probability, due to lack of experience, in general, but especially in diversifying risk programs (which prevents you losing money and/ or face all too sudden)

There are, of course, more questions to be answered, according to Chad Butler “What is my risk tolerance?” The answer will vary based on your age, experience, net worth, risk capital and the actual investment or trade being considered.” However, he also points out that “with today’s growing life expectancies and advancing medical science, the 65-year-old investor may still have a 20-year (or more) time horizon.”

ps: yes, the Google mirror effect is intentional in the pic

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