Facebook looks to capitalize on Arab world growth

Facebook Inc. and online advertisers partner to reach Middle-Eastern youth

Published February 24, 2010 1:01PM (EST)

Facebook Inc. said Wednesday it is teaming with a Middle Eastern digital advertising company as the online meet-up site looks to capitalize on rapid growth in the Arab world.

Facebook said it hopes the deal with Connect Ads will give it better exposure to advertisers in a socially conservative region where online marketing is in its early stages. The Cairo-based advertising booker already handles sales for Microsoft Corp.'s MSN regional portals and other local sites.

"They have the reach and ... they have the connections," said Trevor Johnson, Facebook's head of strategy for Europe, the Middle East and Africa.

The tie-up with an outside ad sales provider mirrors a strategy Palo Alto, Calif.-based Facebook has used in other emerging markets, such as Eastern Europe and Asia, Johnson said in an interview.

It also signals the potential the social networking site sees for the young and growing Arab market, where it counts 10 million regular users.

The company expects Mideast user numbers to shoot significantly higher in the coming months, as it has in other markets, as more members follow their friends onto the site.

"The opportunity is massive ... we're very much at a tipping point," Johnson said. "Now is the time where there are enough people where it makes brands sit up and listen."

For now though, the Middle East represents a small fraction of Facebook's business. The company has more than 400 million active users worldwide. It says about 70 percent of those are outside the United States.

Financial terms of the deal were not disclosed. The initial partnership lasts for three years.

The companies said it was too early to discuss sales targets. Connect Ads managing director Mohamed el-Mehairy said only that he expects "high revenues" from the deal given the site's explosive growth.

Partnering with an established Arabic firm also could help Facebook find its way in a region where authorities typically maintain strict controls on the flow of online information.

Censors in countries such as Egypt, the United Arab Emirates and Saudi Arabia routinely block Web sites based on political, religious and moral grounds. Those countries are also home to the bulk of Facebook's Middle Eastern users.

"It's whether or not we can continue to deliver on the local market experience people expect, but within the rules and regulations" imposed by governments and society, Johnson said. "That's one of the biggest challenges, is building that side of things."

Other major Internet companies are also ramping up their operations in the Arab world.

In August, Yahoo Inc. bought one of the region's largest online portals, Maktoob, for an undisclosed sum.

Two weeks later, Google Inc. launched an online question-and-answer tool it said was designed to boost the amount of Web content available in Arabic. It already offers Arabic-language search pages, and its Blogger publishing platform is popular in the region.

By Adam Schreck

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