Yahoo is making a big move in the Arab world with the announcement of a deal to acquire Maktoob.com, the biggest online community in the region, with over 16.5 million users. The deal has been rumored for months and has just been confirmed by both parties. The financial details of the transaction weren't disclosed but several sources put it between $75 million and $85 million.
"This acquisition will accelerate Yahoo!'s strategy of expanding in high-growth emerging markets where we believe Yahoo! has unparalleled opportunity to become the destination of choice for consumers," Carol Bartz, Yahoo CEO, said. "Access to information and communications tools can positively impact people's lives in many ways, and with the acquisition of Maktoob.com and our investment in the region, the Arab world will soon get a Yahoo! experience in Arabic with relevant local language content, programming and services."
This is the first sale of an Arab web company to a US business and marks an important moment in the region's growth in the tech sector. Yahoo already enjoys around 20 million users in the area, close to half of the Arab world's online population, despite having no dedicated presence or services there. The deal gives the Internet company a solid foothold in the region and Yahoo plans to launch localized versions of its biggest products like Yahoo! Mail, Messenger, Search and later on of properties like News, Finance and Sports.
After the transaction is completed Yahoo will be the sole owner of Maktoob.com and most of its properties. Maktoob.com's current general manager, Ahmed Nassef, will continue to oversee the operations and will report to Keith Neillson, VP of emerging markets. Maktoob properties will now be cobranded but a number of them aren't part of the deal and they will be spun off into a new company called Jabbar Internet Group, headed by Samih Toukan, one of the founders. Services that aren't part of the deal include Souq.com, an auctions site, cashU.com, a mobile phone payment system, Araby.com, a search engine, and Tahadi.com, an online game site.