Don't be evil? Google's mobile services in Africa.

#1

Post by kakooljay » Tue, Oct 13, 2009, 4:19 PM UTC

A recent article in The Economist discusses several mobile services in Africa, including Google Trader, "a text-based system that matches buyers and sellers of agricultural produce and commodities [in Uganda]. Sellers send a message to say where they are and what they have to offer, which will be available to potential buyers within 30km for seven days... These services cost 110 shillings ($0.05) a time, the same as a standard text message, except for Google Trader, which costs double that. In their first five weeks the services received a total of more than 1m queries." [http://www.economist.com/specialreports/displaystory.cfm?story_id=14483848]

So it sounds like Google charges twice as much as its competitors.. just wondering why...

Re: Don't be evil? Google's mobile services in Africa.

#2

Post by byoung2 » Tue, Oct 13, 2009, 4:24 PM UTC

If the service is superior to their competitors' offerings, there is nothing wrong with charging a premium. Actually, when you think of it, charging a lower price might be more evil if it undercuts the competition and puts them out of business (a la Walmart).

Re: Don't be evil? Google's mobile services in Africa.

#3

Post by fmendez » Tue, Oct 13, 2009, 4:35 PM UTC

byoung2 wrote: post #2

If the service is superior to their competitors' offerings, there is nothing wrong with charging a premium. Actually, when you think of it, charging a lower price might be more evil if it undercuts the competition and puts them out of business (a la Walmart).

I would have agreed with your argument about not lowering the price if your offering is superior, but aren't we talking about a very poor country? doesn't Google have enough $$ to make a concession? (I'm not talking about giving the service for free just low enough to match competition).

Re: Don't be evil? Google's mobile services in Africa.

#4

Post by melling » Tue, Oct 13, 2009, 4:46 PM UTC

Google's service must be better, right? Otherwise, people would just pay half the price. What exactly is wrong with charging a fair price in a competitive market. They might even be able to take some of those extra nickels, hire more people and build even more services.

Re: Don't be evil? Google's mobile services in Africa.

#5

Post by kakooljay » Tue, Oct 13, 2009, 7:55 PM UTC

melling wrote: post #4

Google's service must be better, right? Otherwise, people would just pay half the price. What exactly is wrong with charging a fair price in a competitive market. They might even be able to take some of those extra nickels, hire more people and build even more services.

I believe in free markets too (I'm an economist + engineer). But Google, which professes to "not be evil" & is making peanuts on these services, could have set a great example (and not risked damaging publicity)..