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Wed 13 Aug 2003 04:00 AM

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Al Bawaba creeps towards profitability

Next year could be the year, according to the Jordan-based dot-com’s chief executive officer.

Jordanian dot-com, Al Bawaba, is confident that it can move into profitability next year following a healthy rise this year in online advertising revenues. Hani Jabsheh, CEO, says ad revenues have more than tripled year on year so far in 2003, a reflection, he believes, of a much wider acceptance of the online medium.Whereas advertising accounted for a meagre 5% of the portal’s revenue in 2002, it has contributed 25% in 2003 and Jabsheh is targeting 50% in 2004. He declined to disclose dollar figures.“I think 2003 has been the turnaround year for a lot of elements in the [internet] business, particularly the ad business," says Jabsheh. "I would say any portal with a healthy cash position will do very well next year.”In the meantime, he says Al Bawaba has enough of its initial $8.2 million startup capital left to carry it through to profitability.Jabsheh is also predicting a period of consolidation in the industry, which will see the five or six large portals that exist now reduced to two or three that are much stronger financially. “There will definitely be consolidation,” he argues. “It would be unwise to rule it out if it makes sense to your shareholders.”Al Bawaba currently generates revenue in three ways: advertising sales, technology services and content syndication. The portal differs from most of its peers in that it has its own team of journalists and stringers generating original content for the site. Whereas competitors tend to buy most of their material from news wires, Jabsheh is adamant that Al Bawaba will continue to generate its own editorial.“If we do buy our content from Reuters, how would we be different from others?” he observes. “As far as the English language is concerned, wires do a good job, but when you’re targeting the Arab audience you have to be different.”The site has English and Arabic versions, with around 60% of the traffic generated by the Arabic parts of the site. Up to 30% of the site’s traffic comes from the Levant, another 30% from Saudi and the UAE, and after that the next largest audience is Egypt.

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