Daily Ticker

Why Europe could be the next big market for Google and Netflix

Two giant U.S. tech companies are looking overseas to expand business. Google (GOOG) has earmarked $20 billion to $30 billion for foreign acquisitions according to a letter it filed with the SEC late last year, but that was released just Tuesday by the agency. And Netflix (NFLX) has just announced plans to expand into six more European countries later this year.

Netflix will be offering video streaming in Germany and France, the fourth and sixth largest broadband markets in the world, respectively, as well as in Austria, Switzerland, Belgium and Luxembourg.

Related: Next up for Netflix? More profits

The company is already operating in the U.K., Ireland, the Netherlands and Scandinavia so "the plumbing is already there and presumably the demand is there" too  because streaming services are not widely available in Europe, says Mike Santoli, senior columnist at Yahoo Finance. And a larger presence in Europe fits well with Netflix's overall plans.

"Netflix has 35 million or so subs [subscribers] in the U.S. and they've always said 60 to 90 million is ultimately what they think they can get to," explains Santoli in the video above.

And Netflix knows "how to market to individuals" which will help it navigate through the bureaucracies and entrenched competition in Europe, he says.

Related: Is Google the new Microsoft?

Google also has European ambitions but that's not "burning a hole in their pocket," says Santoli. Plus Google is already under pressure from a recent European court ruling that could force it to erase links in searches that individuals find embarrassing or even worse.

That so-called 'right to be forgotten' is a "huge headache" for Google but also a sign of how "ubiquitous, it is," says Santoli.

Bottom line: Europe is open to business for these two tech giants, while China, the world's second largest economy and potentially the second biggest market, is closed to them, Santoli notes.

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