Yahoo’s Purchase of Maktoob May Boost Arab Online Advertising
Aug. 27 (Bloomberg) — Yahoo! Inc.’s acquisition of Arabic-language Internet venture Maktoob.com Inc. is a further boost for a regional online advertising market that may increase as much as 40 percent this year.
The global recession has prompted companies in the Arab world to increase Internet advertising budgets at the expense of newspapers and television.
“A lot of people in the region had looked at the Internet as a failure, a fun thing to do,” Con O’Donnell, managing director of Sarmady Communications, said in a telephone interview yesterday. “When Yahoo and Vodafone throw money on the table it says that this is a serious business.”
Regional spending on Internet advertising is expected to grow 30 percent this year, according to Jawad Abassi, general manager of the Arab Advisers Group, a research company based in Amman, Jordan. Samih Toukan, chief executive officer of Maktoob Group, said he expects spending to increase as much as 40 percent.
Worldwide spending on online advertising declined by 5 percent in the second quarter to $13.9 billion due to the financial crisis, research group IDC said on Aug. 5. U.S. spending fell 7 percent, according to IDC.
The purchase of Maktoob, which was announced on Aug. 25, provides Yahoo with an entry point into a market that includes 22 countries and more than 300 million Arabic speakers. Maktoob is the largest portal in the Arab world with 16 million monthly users. Vodafone Egypt last year purchased Sarmady, a Cairo-based provider of digital content.
Internet Users
Growth has been propelled by the rising number of Internet users in the Arab world, where some 37 million people log on to the Internet, Abassi said.
“Internet penetration in the region is healthy now,” Toukan said in an Aug. 25 interview. “In Saudi Arabia it’s 30 percent. In Dubai it’s between 50 percent to 60 percent. The Internet’s reach is becoming formidable.”
Advertisers spent $190 million on the Internet in the Middle East in 2008, Abassi said. Spending in the region was $8 million to $10 million, the company said in a 2004 report on its Web site.
In Egypt, the most populous Arab country, rising internet usage will help Sarmady’s sales to jump 400 percent this year, O’Donnell said. He declined to provide figures.
Sarmady has attracted campaigns from new clients such as drug maker Novartis AG and Japanese carmaker Toyota Motor Corp. Visa Inc. is also advertising on the mobile phone application of Filgoal.com, Sarmady’s sports Web site.
“Our revenue will continue to spike,” O’Donnell said. “It will at least double every year” in the next five years, he added.
Yahoo, owner of the second most popular U.S. Internet search engine, said the transaction with Maktoob is set to be completed in the fourth quarter. Both sides declined to disclose the value of the deal.
Founded in 2000, the Amman-based Maktoob owns online auction, search, entertainment and matrimonial Web sites, and sells online payment cards.
Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGZucu8scLH4
About the Author
SayginYalcin Saygin is the Founder & CEO of the Middle East's (ME) first & largest car buying service, SellAnyCar.com and Founder of the first & largest online private shopping club in the ME, Sukar.com, which has been acquired by Souq.com, making him Partner at the Souq.com and Jabbar Internet Group, becoming the largest ecommerce company in the Arab world, with 3000+ employees. In its largest acquisition outside the US to date, Amazon.com has acquired Souq.com Group. He has been selected as a UBS Industry Leader, a network of Ultra-High-Net-Worth Individuals. He was also Advisory Board Member & Academic Lecturer of Entrepreneurship at the Canadian University of Dubai. He was referred to as "the region's online business guru" by the National newspaper in the UAE, while Arabian Business named him as "one of the region's finest young entrepreneurs and a major part of the entrepreneurial scene in recent years". Fortune magazine (mag) named him in the 40 under 40 list, as one of the most influential young people in business, Entrepreneur mag ME awarded SellAnyCar.com, with Saygin at its helm, as the "Fastest Growing Company in the ME", while the National newspaper sees it among a handful of tech companies to "have the potential to break the $1bn barrier". In a cover story, Entrepreneur mag ME titled him as "undoubtedly one of the youngest & most successful internet entrepreneurs in the ME”, awarded SellAnyCar.com as "Technology Innovator of the Year”, while Khaleej Times awarded him as the Technology Leader. Gulf Business selected him as 1 of the Top 10 Entrepreneurs in ME. In a cover story, Arabian Business counts him as 1 of the most successful entrepreneurs to call Dubai home. During the World Government Summit, HH Sheikh Saif Bin Zayed, Minister of Interior of the UAE, presented Saygin as an inspiring story for the country, in the presence of world leaders, incl. HH Sheikh Mohammed Bin Rashid Al Maktoum.
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