Yahoo has agreed to buy Maktoob.com, an Arabian portal combining news, business and sports information with mail and chat services.
The deal will allow Yahoo to expand into a new region and to serve a linguistic market that it does not currently reach: Maktoob will give Yahoo the capability to develop Arabic versions of the Yahoo Mail and Yahoo Messenger communication services, it said Tuesday.
Maktoob began life in 2000 as a Web-based e-mail service, and in May claimed around 16.6 million unique monthly visitors. The company is based in Jordan, with offices in Egypt, Kuwait, Saudi Arabia and the United Arab Emirates.
The acquisition deal, for an undisclosed sum, does not include Maktoob Group's auction site, Souq.com, nor its search engine, Araby.com. They will become part of a new company, Jabbar Internet Group, along with two other Maktoob properties: electronic payments service CashU.com and multiplayer gaming site Tahadi.com.
Yahoo plans to offer Arabic-language versions of Yahoo Mail and Yahoo Messenger, and an Arabic search engine, in the coming months, and later will use content from the Maktoob.com portal to localize other services such as Yahoo News and Yahoo Finance.
The companies won't say yet whether the portal's address will change. But Yahoo is planning to set up localized e-mail domains like those it uses for its mail operations in other countries, and to allow Maktoob registered users to access Yahoo services requiring a Yahoo profile or account.
Buying Maktoob.com will allow Yahoo to expand in the Middle East while retaining full control of its brand.
It pursued a different strategy in China, striking a partnership with local e-commerce operator Alibaba.com. Yahoo paid US$1 billion for a 40 percent stake in that company in August 2005, simultaneously handing it control of the operations of Yahoo China. However, their relationship is souring and Alibaba has begun moving services away from the Yahoo brand to other sites in its network. On Monday it rebranded a classified advertising service, moving it to its Taobao.com auction platform.
Yahoo expects to complete the acquisition of Maktoob.com in the fourth quarter, making the site a wholly-owned subsidiary of Yahoo with its current general manager, Ahmed Nassef, reporting to Keith Nilsson, Yahoo's senior vice-president for emerging markets.
Maktoob.com serves several national markets that use a common language, Arabic.
"The Middle East is deeply complex, a complexity mirrored in the online world, and ... it will present certain challenges," Nilsson wrote in a posting on Yodel Anecdotal, Yahoo's corporate blog.
To meet those challenges, Yahoo will be "sensitive to local laws, customs, and norms while also protecting and promoting the rights of our users," Nilsson said.
The company has learned important lessons from its experience in emerging markets, he wrote, and is "committed to responsible global engagement," a reference accompanied by a link to the Yahoo Business and Human Rights Program, launched in May 2008.
Some of those lessons were learned in 2006, the year a civil rights group accused Yahoo of divulging information to the Chinese authorities that had lead to the conviction of a Chinese writer on charges of incitement to subvert state power. Later that year, another Chinese journalist sued Yahoo for providing authorities with evidence of his Internet usage that, he said, had helped land him in jail.