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Google has agreed to buy a $4.5 billion stake in Jio Platforms Ltd., the digital arm of Reliance Industries Ltd., adding to a series of large U.S. investments into an online venture that has nearly 400 million users in India.<\/p>\n
The global search leader is acquiring 7.7% of the fast-growing internet unit for 337.4 billion rupees, Reliance Chairman Mukesh Ambani said Wednesday, confirming an earlier Bloomberg News report. Google, whose Android software runs on most smartphones, will help Jio create an entry-level, affordable mobile device, executives said.<\/p>\n
Alphabet Inc.\u2019s Google joins rival Facebook Inc., which recently put $5.7 billion toward a 10% stake of Jio as well as the investment arms of compatriot chipmakers Intel Corp. and Qualcomm Inc. Interest in Jio is high because it\u2019s seen as a gateway to India\u2019s large and growing online population — second only to China\u2019s, whose door is firmly shut to American internet services like Google and Facebook\u2019s.<\/p>\n
\u201cDigital revolution marks the greatest transformation in the history of mankind,\u201d Ambani told shareholders at Reliance\u2019s annual general meeting. \u201cIndia must lead the change to create a better world. This is Jio\u2019s purpose.\u201d<\/p>\n
Jio is at the center of the Indian tycoon\u2019s ambition to transform his energy conglomerate into a homegrown technology behemoth akin to China\u2019s Alibaba Group Holding Ltd. With Google\u2019s contribution added in, the venture has now attracted somewhere close to $20 billion in recent months. The Reliance share price was up 3% in the buildup to the presentation and has been setting new highs over the past few weeks.<\/p>\n
Google\u2019s backing further burnishes Jio\u2019s credentials in its push to upend online retail, content streaming, digital payments, education and health care in a market of more than a billion people.<\/p>\n
Global tech leaders are looking for multiple ways to grab a slice of the Indian market, where millions of first-time internet users are added every month. Jio Platforms offers the largest base of such users who are increasingly buying consumer goods online and downloading music and video, using cheap smartphones and Jio\u2019s own cut-price data services.<\/p>\n
\u201cThe bigger story is the market access to opportunities that Jio Platforms can provide these investors,\u201d said Satish Meena, senior forecast analyst at Forrester Research Inc. \u201cThey are betting on the track record of Reliance chairman Mukesh Ambani whose scaling up of diverse businesses from energy to retail to telecom has been nothing short of impressive,\u201d Meena said via telephone from New Delhi.<\/p>\n
The flood of investments in Jio is closely tied to the number of internet users it has and the services it can market to them. \u201cJio is already connecting them to the internet, providing them with content and just starting to do commerce. It\u2019s a very good investment opportunity for global companies,\u201d he said.<\/p>\n
For Google, cloud computing is another important consideration, tech industry consultant Chetan Sharma said ahead of the announcement. As a provider, \u201cGoogle has been more reactive than proactive\u201d in the country, he said, and \u201cThis gives them a leg in.\u201d The move would also support Google\u2019s Android smartphone operating system and the company\u2019s mobile payments push in the country, he added.<\/p>\n
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