Internet firms win Intel investment

Tom Gara and Keach Hagey

• Last Updated: May 17. 2009 6:46PM UAE / May 17. 2009 2:46PM GMT

Two Jordanian internet companies have received venture investment from Intel Capital, the venture capital arm of the world’s largest computer chipmaker.

ShooFeeTV, an online television guide, and Jeeran, a website for sharing user-generated content, were announced as new investments by Intel Capital yesterday on the sidelines of the World Economic Forum in Jordan.
Intel Capital has invested in a number of Middle-Eastern technology companies in the past, including four Dubai-based companies.

While it has put money into businesses focused on corporate computing, digital animation, hospitality and real estate, yesterday was the first time it has invested in advertising-supported consumer websites in the region.

The investments represented a vote of confidence in the viability of internet businesses in the region, said Feroz Sanaulla, the Intel Capital vice president for the Middle East.

“Our belief is that broadband penetration in the region is just a scratch on the surface,” Mr Sanaulla said. “As people join the space, advertisers will figure a way to cater to every level of the economic pyramid, from the very bottom to the very top.”
Jeeran’s website is supported by paid advertising, while ShooFeeTV has a business model that combines advertising revenue with income from selling its digital guide to other media companies and content providers.

Online advertising spending in the Arab world has lagged far behind more developed markets such as the UK, where digital spend has outstripped print in recent years. But those in the Middle East’s digital advertising industry see this as an opportunity.
“More than 10 per cent of our population is online, but less than 1 per cent of our media spend is online,” said Yousef Tuqan Tuqan, the chief executive of Flip Media, an online advertising company based in Dubai. “From that point of view, there’s nowhere to go but up.”

Some advertising agencies are expecting robust growth in the segment this year. Ronald Howes, the Gulf region managing director of Memac Ogilvy, who is based in Dubai, said his company expected digital advertising would make up 20 per cent of its revenues for this year.

“A year ago, we were only doing a few digital projects per quarter,” Mr Howes said. “The guys are actually flat out today, so we are looking for a 40 to 50 per cent increase this year from digital.”

Mr Tuqan warned against interpreting Intel’s investment in Jeeran and ShooFeeTV as a signal that they were making huge revenues from online ads.

“Intel didn’t buy into them because of their robust advertising model, they bought into them for their strong relationships,” he said. “It’s similar to Facebook. Facebook hasn’t found a way to monetise its website, but they have all these strong relationships.”
Jeeran, which lets users publish their own text, audio and video, serves an Arabic-speaking audience that wants internet content in its own language, said Omar Koudsi, the site’s co-founder.

“The masses of the Arab world are not on Facebook and LinkedIn,” Mr Koudsi said. “They are on sites like Jeeran, where they communicate and produce content that is relevant to their lives.

“We don’t reach people in Media City; we’re reaching people in Al Ain, in Abu Dhabi, and we’re reaching average people in their language.”

Jeeran, founded in 2000 by Mr Koudsi and his business partner, Laith Zraikat, attracts more than 7 million unique users each month, a figure its founders plan on doubling by the end of the year.

The site would draw more than US$1 million (Dh3.6m) of advertising revenue this year, Mr Koudsi said.

tgara@thenational.ae
khagey@thenational.ae