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Is Alphabet’s Africa Push Paying Off?

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Dec. 4 2020, Updated 10:52 a.m. ET

EMEA revenue growth accelerated

Since Alphabet (GOOGL) doesn’t break out its Africa sales, an analysis of the performance of its EMEA (Europe, the Middle East, and Africa) region could be used to gauge whether the company’s aggressive Africa push is bearing fruits.

In 3Q17, Alphabet reported EMEA revenues of $9.1 billion, implying a growth of 23% YoY (year-over-year). EMEA revenues grew 21% YoY to $8.5 billion in 2Q17, which shows that revenue growth in this region accelerated in the latest quarter.

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$155.8 billion in IT spend

Research firm Gartner is forecasting that IT (information technology) spending in the Middle East and North America will grow 2.4% YoY to reach $155.8 billion this year. This prediction offers a glimpse of the revenue potential for Alphabet and other technology vendors in the emerging markets (EEM).

Alphabet has come up with several initiatives to try to open up markets for its digital products in Africa. Through its Google unit, Alphabet runs Digital Skills for Africa initiative, a program that involves training millions of African youths on Internet skills. Alphabet is also hoping that its global internet program Project Loon will help it expand its digital market in Africa.

Racing for Africa’s digital economy

Facebook (FB), Netflix (NFLX), and eBay (EBAY) are also seeking a piece of Africa’s digital economy. Through its Aquila project, Facebook is working on taking high-speed Internet access to underserved regions of the world such as Africa to help bring more people to its social media services.

Netflix has launched its streaming video service in several African countries, and eBay recently increased its exposure to Africa’s digital economy through an expansion of its partnership with MallforAfrica for cross-border e-commerce.

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