Hello! Maktoob-hoo!

So Yahoo! finally turns its attention to the Middle East, and buys up Maktoob, in a deal that might be worth as much as $100m (although Techcrunch says $85m, other sources $75m)

Tags: JordanMaktoob GroupMergers and acquisitionsUnited Arab EmiratesYahoo! Incorporated
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By  Mark Sutton Published  August 25, 2009

So Yahoo! finally turns its attention to the Middle East, and buys up Maktoob, in a deal that might be worth as much as $100m (although Techcrunch says $85m, other sources $75m).

The deal will see services like Yahoo! Mail, Messenger and Search getting Arabized, and Maktoob's user base of 16 million joining Yahoo's existing 20 million users in the Arab world.

Depending on which figures you go by (InternetWorldStats.com says 47 million users in the Middle East) that's a pretty impressive chunk of the market. There might be a crossover between the two groups of users, but with one Arabic and one not (as Yahoo! hasn't done Arabic before), its likely that this crossover will be smaller than the crossover in areas like search.

There's still a lot of catch-up to do with Google though, which has offered Arabic Gmail since May 2006, with a major update in September last year and a bunch of other services launched for Arabic users.

On search, there is no comparison - Google has around 80-90% of the UAE market and 85-95% of the Saudi market against Yahoo's 7-15% in the UAE and less than 10% in Saudi. A June report from Arab Advisors said that local search engines make up only 5% of search in the region.

The move is a boost for the credibility for Arabic web enterprises,and its good that Yahoo! hasn't just tried to set up on its own, but then again acquisition is the easier path, particularly when your new partner has nearly as many users as you do.

It would perhaps have been more interesting if some of Maktoob's e-commerce operations, like souq.com and cashu.com, were still part of the deal. They are staying with Maktoob founder Samih Toukan, in a new venture called Jabbar Internet Group. Yahoo! doesn't have any particular strength in e-commerce, so its not surprising its left these and gone for instant access to users, but this is the area where the region lags behind the most. Email and chat are one thing, and the majority of Arabic users have adapted to the tools available in English or French or else found workable local versions, but for e-commerce, and B2C in particular, there's still a long way to go. The two companies say they will work closely together, so it will be interesting to see if Maktoob's pioneering spirit, and willingness to acquire other local companies to gain market share will translate in Jabbar Internet Group making solid gains in e-commerce. Good luck to them!

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