Since I first visited Moscow three decades ago, the Russian capital has undergone a thorough transformation. Range Rovers and Land Cruisers now clog once empty boulevards. Glittering shopping malls featuring Louis Vuitton and Chanel have replaced grey, empty storefronts. Restaurants feature haute cuisine, not black bread and borscht.
My trip was fashioned around a conference about media and the Net held in the opulent Ritz Carlton and sponsored by the Russian equivalent (complete with the salmon colored pages) of the Financial Times, Vedmosti. Although many speakers from publishing echoed concern about the net driving readers to free online content, most expressed confidence that the transition will be smoother (and perhaps slower) than in the West.
Despite a recent financial-crisis induced blip in economic growth, the Internet is gaining traction. More than 36% of Russians now surf the net. According to MForum Analytics, sales of smartphones grew by 28% last year to 4.4m smartphones worth $1.6 billion.
Russians love the newest technology. When I showed off my Nexus phone, not yet available in Russia, and its features ranging from voice search to Google Goggles, the audience responded with enthusiasm. Later that day, I tested Goggles, taking the picture shown here of Red Square – and the new service that identifies landmarks led me right to the Wikipedia web page about the square.
For Google, Russia represents a challenge. Yandex, a local search engine, leads the market and has often beaten us to introduce cool products. It already has launched a version of StreetView in Moscow and St. Petersburg, before we have even begun filming for our own version. Unlike us, our Russian competitor doesn’t blur faces or license plates. Seemingly, few Russians demand such privacy controls.
President Dimitry Medvedev is a fervent fan of the Net. He has launched his own blog and You Tube channel, hosted a group of Silicon Valley executives, and sponsored several intriguing initiatives designed to promote foreign and Russian web investment. The president seems to accept the openness that accompanies the growth in the Internet as a central building block of a prosperous, modern society.
The Kremlin even envisions establishing a Russian Silicon Valley outside of Moscow. It’s an idea that intrigues us and we are considering how best to participate. Russia certainly boasts a first-class educational system that produces the engineering firepower needed to drive dozens of successful tech startups. Google alone employs about 200 Russian engineers around the globe.
The key to Silicon Valley’s success lies in the alchemy between high-level academic inquiry and skills, abundant venture capital funding combined with legal certainty, and a free flow of information. A massive governmental effort could help transform a fuels-based economy into a high-tech one, particularly if it establishes a regulatory and legislative environment favorable to entrepreneurialism. At Google, we hope to play our part in boosting the Russian Internet.
Posted by Bill Echikson, Head of Communications, Southern, Eastern Europe, Middle East and Africa
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