Published on August 25th, 2009 | by SayginYalcin0
Yahoo! Of Arabia
Yahoo! and Microsoft may have announced their long-awaited marriage last month, but that doesn’t mean they can’t see other people. While Microsoft ties up a partnership with French advertising firm Groupe Publicis, Yahoo! is taking refuge in the Middle East, where it has sealed a deal to buy online portal Maktoob for an undisclosed sum.
The price is not likely to exceed $20 million to $30 million, according to Trip Chowdhry, an analyst with Global Equities. He thinks the acquisition of Jordan-based Maktoob, which was announced on Tuesday, makes sense. “Yahoo! is a global brand, but global brands need to have a local presence,” he said. “I think it gets you good talent, and the synergies are there.” He added that Internet portals like Maktoob attracted display advertising in particular, such as banner ads, which do not fall under Yahoo!’s search partnership withMicrosoft .
Chowdhry said the move might trigger acquisitions of other portals, though there are few independent players in the top 10 most-visited sites in the Middle East. According to Maktoob’s Web site, Google , Facebook and MSN are the usual suspects dotting the top 10 rankings. One notable exception, however, is Kooora, a sports-focused Web site popular in countries including Saudi Arabia and Libya.
Yahoo! is not buying a market leader with this deal. When it comes to traffic rankings, Maktoob is actually less popular in the Arab world than its new owner–only in Saudi Arabia is Maktoob ranked higher, according to Maktoob’s Web site. But what counts is the local content, delivered in the Arabic language: Yahoo! says Middle East markets are in the “early stages” of Internet adoption, with only 1% of all online content in Arabic, despite the fact that there are 320 million Arabic speakers worldwide. In other words, the growth potential is promising.
Shares of Yahoo! ticked up 2 cents, to $15.01, during midday trading in New York. The stock is down 15% since it announced its search alliance with Microsoft at the end of July, which will see Microsoft shoehorn its Bing search brand onto Yahoo!’s platform in exchange for the lion’s share of expected search revenues on Yahoo!-operated Web sites. (See “Boo Hoo For Yahoo!”)
Maktoob was founded by Samih Toukan and Hussam Khoury in 2000 as a free online e-mail service, but grew to encompass online payments under the “cashU” brand and Internet auctions with “souq.com.” These companies will be favorably promoted on the new Yahoo!-owned Maktoob.