Regional site seeks investment in 'the low seven figures' in return for minority stake.
Booming YouTube rival seeks more cash
A video-sharing website that aims to compete with YouTube in the Middle East and which, unlike YouTube, is making money, is entering a new round of venture capital funding. Ikbis, which was founded in Jordan in late 2006, now serves up more than nine million online videos every month. While YouTube is estimated to lose hundreds of millions of dollars every year for its owner, Google, the Ikbis site is already profitable, covering its costs by selling display advertising and forming partnerships with mobile network operators.
After the initial investments from friends and family of the founders, a new round of funding will help the company expand its business development operations, which are aimed at forming new partnerships with regional media and advertising companies. "Where we go from now, after establishing this level of traffic and this level of financial self-sustainability, is to attract a sizeable investment that will help us realise some great ideas that we have," said Ahmad Humeid, the founder of TootCorp, the parent company of Ikbis.
Ikbis is looking for an investment in "the low seven figures" in US dollar terms, in return for a minority share in the company, its management team said. "Seeking investment is a priority for us now," Mr Humeid said, "but we will not do it at any cost, and we don't have to. The beautiful thing about Ikbis is that we can self-sustain for a good period of time." The site works on a similar model to YouTube, allowing users to upload and share videos. But Ikbis has placed a larger emphasis on encouraging original content to be created by users, to fill what its founders consider to be a gap in the market for quality local content in the Middle East.
"We're looking for an investor who believes in the disruptive potential of what we are doing," Mr Humeid said. "We need an investor who understands where media is going: it's going digital, and the younger generation are moving toward a new mode of consumption." YouTube, which was acquired by the search engine company Google for US$1.6 billion (Dh5.87bn) in 2006, remains by far the most popular online video site in the Middle East. Some telecommunications executives say the site is responsible for up to 30 per cent of all international bandwidth consumed in the region.
In competing with Google, the world's largest internet business, the management of Ikbis is aware that the company is unlikely to land blows on a technical level. Google employs thousands of the world's best software engineers and runs the world's most powerful network of distributed computing resources, both important factors in delivering large volumes of streaming internet video. Instead, Ikbis aims to outmanoeuvre the global giant through better local deal-making and partnerships. While Google's presence in the Middle East is growing, Ikbis believes a local operator can do a better job understanding the needs and opportunities of the regional market, both in content creation and in partnerships with the media and advertising industries.
The company already works with the Zain mobile network in Jordan, providing a feed of video clips that users can download to their phones. It hopes partnerships with more regional mobile operators will become a big source of future revenue. @Email:email@example.com