Yahoo Expands into ME, Nets Maktoob.com

DUBAI – Yahoo! Inc., the Internet heavyweight and search engine pioneer, is making its biggest foray into the Middle East’s online market with an agreement to buy Maktoob.com, one of the Arab world’s most popular Web portals.

By Abdul Basit

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Published: Wed 26 Aug 2009, 10:47 PM

Last updated: Thu 2 Apr 2015, 3:46 AM

Yahoo! did not disclose the value of the acquisition, which it announced on Tuesday in Dubai. Jordan-based Maktoob.com will become a wholly-owned subsidiary of Yahoo! under the deal, set to be completed early in this year’s fourth quarter.

The Washington Post and some Web-based news sources reported that Yahoo! is paying $85-$100 million for Maktoob.com. A Yahoo! spokesman in Singapore declined to discuss these reports, and executives at Maktoob.com could not immediately be reached for comment.

Maktoob.com is read by one in three people online throughout the Arab world. Its acquisition will extend California-based Yahoo!’s offerings by adding Arabic-language content and services, as well as Arabic versions of the Yahoo! Messenger and Yahoo! Mail services.

“We see great growth potential in both audience and advertising in the Arab world, and combining with Maktoob.com will allow us to quickly build our presence there with high quality products. This is a big win for publishers, advertisers, and consumers in the region,” Keith Nilsson, Yahoo! Senior Vice-President for Emerging Markets, said in a statement.

Samih Toukan, founder and chief executive officer of Maktoob.com, said Yahoo! and his firm are “natural partners” and that “this combination should help energise the Internet market in the region as a whole.”

Maktoob.com has 16 million monthly users in Arab-speaking countries, Toukan said in the statement. Yahoo! claims to have 44 million monthly users in the Middle East and Africa.

Maktoob, which translates as “written” in Arabic, is part of Yahoo!’s broader strategy to expand into underdeveloped but promising markets. The US company already has operations in India, Southeast Asia and Latin America.

“This acquisition will accelerate Yahoo!’s strategy of expanding in high-growth emerging markets where we believe Yahoo! has unparalleled opportunity to become the destination of choice for consumers,” Yahoo! Chief Executive Officer Carol Bartz said.

The buyout comes a month after Yahoo! agreed to join forces with Microsoft Corp. in the Internet search and advertising business to help create a counterweight to Google Inc. Yahoo! and Google are currently embroiled in a global battle for Internet domination and facing fresh competition from the likes of Facebook and Twitter.

Competition has become increasingly fierce amid the global financial crisis, with advertising revenues declining dramatically in developed markets as clients cut budgets. In an effort to bolster revenues, the pair have been expanding into emerging markets, where Internet penetration and technology take-up are relatively low compared to the West and advertising is still witnessing double-digit growth.

“If you look at the Arab region, with a population of 320 million people across the Arabic-speaking world, and a multi-billion dollar offline ad market which is growing at 25 to 30 per cent, this represents a significant opportunity going forward. That is why we believe now is the time to be investing in this region,” Nilsson said.

Yahoo! will target the entire Arab region from North Africa to the GCC region but focus initially on the UAE, Saudi Arabia, Egypt, Jordan and Kuwait. “We will be looking to expand into other Arab countries in the future,” Nilsson said.

While Internet usage in the Middle East has grown more than tenfold since 2000, most markets are still in early stages of adoption. According to the World Bank, there are more than 320 million Arabic speakers worldwide, while less than one per cent of all online content is in Arabic.

Nilsson said that YahooI would not introduce Arabic versions of it products into the region until next year. Google already provides service in Arabic.

Founded in 2000, Maktoob.com is one of the largest portals in the Arab world. It owns on-line auction, search, entertainment and matrimonial Web sites and sells on-line payment cards.

Upon completion of the deal later this year, the remaining Maktoob Group companies — including Souq.com, cashU.com, Araby.com, and Tahadi.com — will operate under a new entity called Jabbar Internet Group, to be managed by Toukan.

· abdulbasit@khaleejtimes.com



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