Planetarabia reassesses business model

Planetarabia has gone through a face-lift by teaming up with London based Zawya.com and Hong Kong based Alibaba.com hoping to become profitable by December 2001

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By  Massoud Derhally Published  May 10, 2001

Planetarabia.com a Middle East B2C horizontal portal has been forced to restructure its business model. The company, which moved its business development and advertising-sales division to Dubai Internet City in March 2001 has reorganised its operations in an effort to reduce costs, diversify it’s revenue stream and better serve its customer base in the Gulf region.

Imad Benharouga, CEO of Planetarabia.com, admitted that the company had distanced itself from the press in the past 6 months. He attributed these developments to “market conditions,” in the technology sector in the US and added that ‘the company’s office in Silicon Valley was hit the hardest’. Benharouga held that such steps were “necessary in order to review the positioning of the company, restructure the revenue stream and make the company grow at a faster speed.”

The company has not been profitable since it’s inception in September 1999 and has only raised $4.5 million in venture capital. Although Benharouga said the original plan had been to break-even by 2002, the deadline has been brought forward. He stressed that the “company now has a deadline of December 2001 and that the target may be met before then.”

Advertising which is a major source of revenue for internet companies has declined immensely with the dot.com meltdown. The downward turn has been a salient factor in the reassessment of Planetarabia’s business model. Planetarabia is collaborating with new partners to enhance it’s content and diversify its revenue stream.

The new money channel will provide business and financial information to be provided by London-based Zawya.com. Zawya covers developments in equity markets and financial services in the Middle East and North Africa. Saad Faruqui, head of business development believes the partnership with Zawya “is the best fit compared with other players in the industry will enable Planetarabia to offer comprehensive content to its customers.” At the same time Planetarabia will serve as a gateway by providing Zawya with access to its large customer base.

The company derives 70% of its revenue from advertising and banner ads. Benharouga recognised the oncoming challenges and teamed up with Alibaba.com, the world’s largest business-to-business marketplace based in Hong Kong. Planetarabia aims to make use of Alibaba's core services, which revolve around 27 different vertical industries to leverage its brand, crossover into the business segment and expand its service offerings.

Planetarabia will also broaden its advertising services by offering customer designed solutions, implementing a more interactive approach around its client’s needs. Benharouga emphasized that “times change but fundamentals don’t” and the essentials for Planetarabia are “profit and revenue, customer loyalty, sales, cash flow and self reliance.”

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