Arabian Business Web Index - July 2003 Report

Next year could be the year, according to the Jordan-based dot-com’s chief executive

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By  Hitesh Uchil Published  September 2, 2003

Al Bawaba eyes 2004 profitability|~||~||~|Click here to view the Arabian Business Web Index for July 2003"

Jordanian dot-com, Al Bawaba, is confident that it can move into profitability next year following a substantial rise this year in online advertising revenues. Hani Jabsheh, CEO, says ad revenues have more than tripled year on year so far in 2003, a reflection, he believes, of a much wider acceptance of the online medium.

Whereas advertising accounted for a meagre 5% of the portal’s revenue in 2002, it has contributed 25% in 2003 and Al Bawaba is targeting 50% in 2004.

“There’s a lot more awareness, people are convinced that we do have critical mass in the region and it’s going to grow much further,” says Jabsheh. “I think 2003 has been the turnaround year for a lot of elements in the [internet] business, particularly the ad business. I would say any portal with a healthy cash position will do very well next year.”

In the meantime, he says Al Bawaba has enough of its $8.2 million startup capital left to carry it through to profitability.

Exactly how much money is being spent on advertising on regional Web sites is unclear, since Jabsheh and other dot-coms won’t disclose their financials. Impact Proximity, an agency specialising in online campaigns, believes that the larger portals in the region could be generating around $2 million a year in revenue.

Whatever the numbers, the company agrees that the industry is growing rapidly. “Speaking on behalf of Impact Proximity, we had already surpassed our 2002 [revenue] total by the eighth month of 2003,” says Dimitri Metaxas, Impact’s online media manager. “The main reason is a substantial increase in individual campaign budgets, coupled with the large number of new advertisers moving into online media for the first time.”

The company also believes that online advertising, whilst still a small part of the pie, has become accepted by mainstream advertisers as a vital part of their ad budget.
“Online advertising plays a unique role within each brand’s media strategy, but on the whole online budgets are small in comparison to traditional established media,” says Metaxas. “A figure of around 5% [of total advertising budget] would not be far off the mark.”

As the online industry matures in the region, Jabsheh is predicting a period of consolidation, which will see the five or six large portals that exist now reduced to two or three that are much stronger financially. “There will definitely be consolidation,” he predicts. “It would be unwise to rule it out if it makes sense to your shareholders.”

Al Bawaba currently generates revenue in three ways: advertising sales, technology services and content syndication. The portal differs from most of its peers in that it has its own team of journalists and stringers generating original content for the site. Whereas competitors tend to buy most of their material from news wires, Jabsheh is adamant that Al Bawaba will continue to generate its own editorial. “If we do buy our content from Reuters, how would we be different from others?” observes Jabsheh. “As far as the English language is concerned, wires do a good job, but when you’re targeting the Arab audience you have to be different.” Al Bawaba has English and Arabic versions, with around 60% of the traffic now generated by the Arabic parts of the site. Around 30% of traffic comes from the Levant and another 30% from KSA and the UAE.

Click here to view the Arabian Business Web Index for July 2003"

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||**|||~||~||~|Ranking in category by page views: Web sites are ranked according to the total number of page views reported in the sample period.

URL: Internet address of the Web site.

Site description: Web site owners have submitted their own descriptions. These have been edited by Arabian due to space constraints.

Site category: Categories have been formed by Arabian for the purpose of comparing Web sites in a like-with-like environment.

Total number of visits in period: The cummulative total of visits to a site in the specified period. A person visiting more than once in the sample period will be counted every time that person visits. Visitors to a site for a prolonged period, i.e. opens a Web site and leaves that site open on his machine all day, can count as several visitor sessions in that day. Web tracking software can effectively call a visitor session closed if it remains inactive for a predefined period.

Average duration of visitor session in period: The time taken between entering a site and leaving a site.

No. of new visitors in period: A count of visitors who have not at any time been logged by the Web tracking software.

No. of unique visitors per month: Unique visitors are counted using the visitor's IP address, domain name, or cookie.

No. of page impressions in period: A count of hits to pages defined as documents or forms by the Web tracking software. In most, but not all cases, a cick to a new page within a Web site will count as a single additional page impression. The supporting graphics on pages are not counted.

Sample period: The dates during which the log data was generated.

Verified by: Note of whether the visitor data has been checked by Arabian or whether the site owner has supplied data without independent verification.

Click here to view the Arabian Business Web Index for July 2003" ||**||

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