Google Gets Busy in Middle East

Not to be outdone by recent moves from Yahoo and News Corp, Google is getting busy in the Middle East market.

Google already dominates search among Arab-speaking users. Now it is making a serious play in Arabic digital content.

Its release of Google Sites in Arabic and four new Arabic editions of Google News (for Egypt, Lebanon, UAE and Saudi Arabia) represent a smart effort to expand beyond search into content.

Offering a free, Arabic version of Google Sites is designed to make customized website creation in Arabic a simple process with (of course) searchable results. Google powering Arabic content creation, pure and simple.

Arab publishers, especially regional newspapers, will need to speed up efforts to build strong news sites (and aggregators) and online brands, or risk permanently losing their readers to local Google News in Arabic.

Through search, Google is already the main gateway for most users to reach news sites. Middle East publishers will completely lose control over how their audience reaches them if Google News in Arabic succeeds, if they fail to build a direct relationship with their online readers.

Google moves in apps and news pale in comparison to the dollars and headlines of this week’s big investments of Yahoo and News Corp.

However …

Google is already the #1 site among Internet users in Saudi Arabia, Egypt, UAE, Jordan, Kuwait and Qatar.

If Google is able to penetrate both the Arabic content creation and news spaces, it will have a formidable position in the Middle East before the online market truly reaches its growth potential.

And it will have outflanked Yahoo, News Corp and all other comers.

Quick Hit: Google may also be planning an expansion in Jordan, perhaps even siting their regional IT hub there.

Yahoo Grabs Big Piece of Middle East Internet Market

Eventually, global Internet companies would realize the Arab world is one of the last underdeveloped frontiers for digital media. That day was yesterday. Yahoo bought Maktoob.com, the largest Arabic online portal, for an undisclosed sum, reportedly around $100 million.

This is a big deal. Even Twitter is a buzz with the news.

The Arabic speaking world of Internet users has not been completely ignored. Google opened it first office in the Arab world in 2006, and is the top search engine among Arabic users. Already 8% of Facebook's user base is in the Arab world. Yahoo is not the first major equity investment in a portal in the Arab world (or even a portal based in Jordan). Intel Capital recently invested in Jeeran, a Jordanian based social network with 1 million members. And that was Intel’s seventh investment in Middle East digital media. Last year, Vodafone Egypt bought Sarmady Communications (Sarcom), a digital content company based in Egypt.

But with this deal, Yahoo landed the biggest digital media acquisition to date in the Middle East. Yahoo calls it their biggest geographic expansion in years. I call it a very smart move. Maktoob has been the #1 Arabic website (in terms of users) for years, steadily growing organically and through a series of regional acquisitions. Its acquisition was inevitable. The only surprise is that it took so long. Maktoob has been around for almost 10 years.

320 million Arabic speakers worldwide, but only 1 per cent of all online content is in Arabic. That math adds up to outsized growth as the online advertising market catches up with the rapid rise in Internet penetration and usage in the Arab world. This deal alone may drive increased online advertising in the Middle East, as well as accelerate the shift away from newspapers and print advertising.

So Maktoob becomes Yahoo Maktoob at the price of $6 per user ($100 million for 16.5 million users). Although Middle East entrepreneurs will envy the valuation and the newly minted millionaires among them, that price will look dirt cheap one day. And that day is today.