Agency report
 
Bangalore, Apr 26: Web giant Yahoo! assigned a bigger role to its Indian unit in a global revamp on Wednesday as it prepared to take on US rival America Online in one of its fastest growing advertising markets.

India, where Yahoo!’s revenue tripled last year, would serve as the hub of emerging-market operations, designing and handling engineering products and services for countries from the Philippines to Brazil, co-founder David Filo told a news conference.

“There’s a lot more emphasis on emerging markets because they present the next big opportunity for us,” Filo, who with Jerry Yang co-created the Internet navigational guide in 1994, told reporters in Bangalore.

His comments came ahead of plans by AOL to launch an Indian portal called AOL.in on Thursday, in its first foray into the Asia-Pacific market.

AOL has named India its flagship market for the region and its global chief operating officer Ron Grant will be in Bangalore for Thursday’s launch.

Yahoo!, which has 1,000 people working in India, would commit more resources to the Bangalore-based unit and hire more people as part of its local expansion, said Filo, who refused to be more specific, citing company policy.

The Sunnyvale, California-based company on Thursday is due to open a new research and development facility in Bangalore.

Yahoo! has divided its international operations into three regions Asia, Europe and emerging markets as part of a global reorganisation as it tackles increasing competition from rivals such as Google and AOL for Internet advertising.

Google also has an office in Bangalore, known as India’s Silicon Valley. “Bangalore made the most sense as a centre of excellence for emerging markets because of the critical mass of talent accumulated over the years,” Filo added.

He said about 20 per cent of Yahoo!’s engineering workforce was based in India.

“When we started we were looking at India as an offshoring base, but we have gone past that,” he said. “Things have come a long way and a lot of great things have happened here. India is now one of Yahoo!’s top priorities.” Online advertising accounts for a miniscule $60 million of the three billion dollars Indian companies spend on promotional campaigns annually, said George Zacharias, managing director of Yahoo! India.

But Internet advertising revenue was projected to grow by 50 per cent a year, outpacing the industry average, as companies plug their products to an expanding online audience, Zacharias said.

Yahoo! was adding 200 to 250 advertisers from India as “more computers come online and more people access the Net on mobile phones,” he said.

India has about 25 million Internet users who visit the web every month and 85 percent of them log onto Yahoo!, according to Zacharias. The number of Internet users is growing by 40 per cent a year.

The country is also important as a base for web companies that are trying to save on costs, leveraging on a technically skilled, English-speaking workforce that earns salaries just a fifth of those paid in the United States or Europe.

Yahoo! was “deeply” committed to India, said Sharad Sharma, head of the company’s research and development centre here.

“India becoming a hub for Yahoo!’s emerging markets is a reflection of its growing importance in the web world,” he said.