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Yahoo's Bold Advance into the Middle East |
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08.27.2009 |
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Web rivals watch Yahoo's purchase of Arab portal Maktoob to see what gains and costs attend a big Mideast commitment. Censorship is a big issue
On the pages of Arabic-language Web site Bentelhalal, men and women from Saudi Arabia, Egypt, and other parts of the Middle East and North Africa list personal details and describe the qualities they're looking for in a mate, such as "polite," "stylish," and "God-fearing." It's reminiscent of an American dating site, except for one big twist: All of these singles are ready to marry.
Bentelhalal is one popular site within Maktoob, the large Jordanian Internet property Yahoo! (YHOO) said it was acquiring on Aug. 25 for what the Web site TechCrunch reported to be $85 million. It's also a sign that Yahoo, which trades in tech news and celebrity gossip to assemble its audience at home, has entered a different world.
The purchase gives Yahoo command of one of the most visited online news portals in the Arab world, with business, finance, games, blogging, and other sites that reach an estimated 16.5 million people. Yahoo says it will translate its home page, e-mail, and instant messaging services into Arabic but plans to keep Maktoob's local flavor mostly intact.
While rivals Google (GOOG) and Microsoft (MSFT) have waded cautiously into the emerging Middle East, Yahoo will be the first major Internet company from the West to run a full online content business in the region. How the company navigates the cultural and legal norms of the Arab world will be watched closely by competitors back home. So will its approach to Internet censorship.
Maktoob: Supported by Online Ads
The relatively tiny market for online ads in Arab countries has companies stepping carefully into the market. Microsoft partners with an Egyptian ISP for its MSN Arabia site, and Google offers an Arabic-language version of its search engine. But neither has entered the Middle East with as much conviction as Yahoo. "Many of the emerging markets are very similar. You have nascent penetration of online users and ad dollars," says Keith Nilsson, Yahoo's senior vice-president for emerging markets. "The Middle East is unique because you have a continuous language which a very large population speaks—one of the reasons we were interested in this acquisition."
The market for online advertising and transactions in the Middle East may be tiny by Silicon Valley standards, but experts say the potential is huge. Maktoob is largely supported by online ads, which are expected to make up a $142 million market among Arabic-speaking countries by 2011, according to Dubai-based Madar Research.
"The Arab citizen is hungry for local content in their local language, and this is something that has enormous potential" for Internet companies, says Soumitra Dutta, a professor of business and technology at Paris business school INSEAD. Dutta says the Middle East has improved its technology competitiveness faster than any region in the world over the past five years, according to a study he conducted with researchers from the World Economic Forum. Technology companies that include Cisco Systems (CSCO) and SAP (SAP) are seeing fast growth in the region, and Cisco has been investing aggressively there.
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Source:www.businessweek.com |
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