Link in dot-com mega acquisition
Khaled Bichara's LinkdotNet has acquired nine dot-com companies in a single swoop, a key part of the company's ambitious regional expansion plans.
Egyptian ISP, LinkdotNet, announced on Tuesday that it is gobbling up no less than nine of the country’s dot-com companies in a single swoop.
Terms of the deals were not disclosed, but according to Link CEO Khaled Bichara, the acquisitions purely involve equity swaps. Following the closure of the deals, LinkdotNet, owned by the Orascom Group, is now valued at LE355 million (around US$80 million.)
LinkdotNet’s decision to take over so many companies and the timing is being driven by what Bichara describes as “favourable market conditions” (i.e dot-coms are struggling.) Egypt’s ‘pay as you go’ Internet model, introduced in January, which scrapped ISP subscriptions and requires users only to pay phone charges for the time they spend on air, is another major reason.
Now that ISP subscriptions are gone, ISPs earn revenue from the time a user spends online. Acquiring these companies is all about gaining a diversity of content that will entice users to spend more time online, and thus boost Link’s revenues.
“These companies can help us create content that will make users stay [online] longer and make us more money,” Bichara told ITP.net. “In Egypt, this can really change the balance between [an ISP] making and not making money.
“One year ago, making a customer stay [online] another thirty minutes would have been a bad thing for me as Link, because I used to sell a LE100 [per month] subscription for unlimited access. The less you stayed, the more money I made. Today, the longer you stay online, the more money I make,” Bichara added.
The acquisitions are not just about reinforcing Link’s position in Egypt, however. The company also wants to strengthen itself for its continued push into other Arab markets.
The company is already present outside Egypt in Jordan; and Algeria, Pakistan, Syria and Saudi Arabia have all been earmarked for expansion. “We really hope to be the number one online service in the region, not only in Egypt and Jordan,” says Bichara.