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Alphabet (GOOGL) Invests in Indian Startups to Aid Digitization

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Alphabet’s (GOOGL - Free Report) division Google continues to boost investments in India.

Recently, Google along with Mithril Capital invested $145 million in an Indian startup Glance, which is part of advertising giant InMobi Group.

The lock screen platform Glance, which is a subsidiary of advertising giant InMobi Group, uses AI to offer personalized experience to users. The service replaces the empty lock screen with locally relevant news, stories and casual games.

In addition to this, the tech giant also invested in VerSe Innovation, which owns short-video app Josh and Dailyhunt. Reportedly, DailyHunt claims to serve more than 300 million users with news and entertainment content in 14 Indian languages.

The latest deals are in line with the company’s aim of giving a push to India's digital transformation.

Google’s Growing Efforts

Google is deepening focus on India, and continues to strengthen its reach in the country as well as aid global presence. The latest deal is a testament to the same.

In July, Google announced plans to invest $10 billion in India over the next five-seven years.

It aims to focus on areas that are related to India’s digitization. These include enabling access to information via Internet in local languages and building new products and services in varied areas like consumer technology, education, health, as well as agriculture.

In addition, it aims to help small and medium businesses to adopt digital tools for adapting to the current situation.

Moreover, the company invested $4 billion in Jio Platforms Limited, the digital arm of a massive India-based conglomerate, Reliance Industries. The investment was made to further expand in the telecom space in India.

We believe these endeavors bode well for Google’s persistent efforts toward expanding presence in India due to ongoing digitization in the country.

Intensifying Competition

Competition is intensifying in India as growth opportunities in the country are alluring enough to attract foreign direct investments. Google’s latest move is a testament to this fact.

Major big companies, namely Amazon (AMZN - Free Report) , Facebook and Microsoft (MSFT - Free Report) , among others, are also leaving no stone unturned to capitalize on the prospects in the digital space of India.

We note that Amazon recently announced that it will create 1 million jobs in the country. The company strives to create these jobs in both direct and indirect forms. The e-commerce giant aims to reach the target of 1 million jobs by 2025.

These jobs will require Amazon’s investment in logistics, technology, skill development and infrastructure. Moreover, the company is likely to create jobs involved in content creation, retail and manufacturing.

Meanwhile, Facebook invested $5.7 billion to buy a 10% stake in Jio Platforms Limited, the digital arm of Reliance Industries.

Also, Microsoft inked a 10-year partnership with Reliance Jio — the largest telecommunication company of India — mid last year. The deal enabled Reliance to offer Azure services, Microsoft 365 and Microsoft AI platforms to business customers.

Google’s growing endeavors remain noteworthy. We believe strengthening momentum of the company across varied verticals like health, education and agriculture, among others, is likely to aid its presence in the country.

Zacks Rank

Alphabet currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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