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Fri 4 Jun 2010 04:00 AM

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Kings of the classifieds

Meet the men behind Dubizzle, the UAE's biggest dotcom success story.

Kings of the classifieds
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Kings of the classifieds
Dubizzle was launched in 2005, five years after the dotcom bubble burst on March 10 2000. The Nasdaq fell nine points in just six days.

It's arguably the UAE's biggest dotcom success story, and now it has the rest of the Arab world in its sights. Meet the men behind Dubizzle, the UAE's biggest bargain basement.

There are certain expectations that come with entering the offices of a dotcom start-up. At the very least, there should be squashy beanbags and a games room. At the Google-sized end of the scale, props include fireman poles, ice cream bars and wall-sized aquariums - all frantically signing, should you have missed it, that this is a culture of creativity.

Dubizzle, arguably the UAE's biggest online success story, restrains itself to a blackboard wall and mini-packs of Maltesers. "We don't really go in for clichés," says co-founder Sim Whatley - or El Presidente, if you go by the title on his business card - a touch apologetically. "But check back with us when we're the same size as Google."

It might shun its style guide, but Dubizzle's launch story is a faithful reproduction of the dotcom script. It reads like this: twenty-something banker meets twenty-something economist and spots a niche in cyberspace. Add $12,000 in seed capital, a crash course in site design (courtesy of the weighty tome ‘Idiot's Guide to Building a Website') and the UAE's biggest bargain basement was born. It may have come five years after the internet bubble burst in March 2000 - though the Gulf largely missed that party - but Dubizzle bore all the hallmarks of dotcom fever.

"We just went in recklessly," recalls co-founder - or El Capitan - JC Butler, "and the market responded right away. We didn't have the metrics figured out but just the fact that people were using us, this site we'd created; to us that was big success."

As a tactic, recklessness paid off. Today, Dubizzle is - by a stretch - the largest classifieds site in the UAE, raking in nearly 2.5 million visitors a month, and a massive 34 million page views. In the last three years, first-quarter visits have grown by 200 percent, 202 percent and 169 percent respectively. Less than a year after its launch the newest addition to the family, Abudhabi.dubizzle.com, comprises nineteen percent of the traffic generated by the UAE's two key cities. Need a job, a car, a new sofa? Chances are, Dubizzle's jumble of listings will have it.

In the five years since its launch, better-capitalised sites have mushroomed, floundered and failed. How has Dubizzle done it?

A visit to the stripped-down site gives no clues. Devoid of sleek graphics and arty animations (and, it should be said, infuriating pop-up adverts), it's a throwback to the primitive, pre-Facebook era of web design. All you'll find are hundreds upon hundreds of classified adverts.

Staff number just 25 - compare that to eBay, the auction site behemoth, which employs more than 15,000 - so there is no cushioning between Dubizzle's users and its founders. As a business model, it's simple but supremely efficient.

"There just aren't a lot of sites that do what we do, as a classifieds website," shrugs Whatley. "There are competitors within certain verticals, such as property or cars, but as far as being a horizontal classifieds website, we see ourselves as a market leader."

Its style of doing business is also unusual, in that Dubizzle offers nearly all of its features for free. The site doesn't charge for 99.9 percent of listings, doesn't take a cut of the transactions it generate and lets small businesses flog their wares at no charge. The only fees Dubizzle charges - and thus the only revenue it makes - are from online ad space and certain property ads by real estate agents.

It's a token AED50 charge that, says Whatley, was imposed to regulate the glut of property ads and clean up the site for users, rather than for revenue.

"Whatever we do, the way we generate revenue or revenue streams is to increase the usefulness and cleanliness of the site. We never think about trying to charge - Dubizzle should be free to the individual. It's a community site," he says.

Ordinarily, a company that shuns the normal rules of business is living on borrowed time, but Dubizzle's edge is in its size and price. It has no serious rivals, a zero-fee structure and is subservient only to its public. You can't match it and, at that price, you can't beat it either.

Though Dubizzle's owners are staying tightlipped on the firm's value, it is evident that the site has the potential to earn stupendous amounts of cash. And they know it.

"The most important thing was creating a popular site that people will use... not necessarily making money. Even Google for a long time made no money until they figured it out. YouTube lost money for a long time and it still sold for $1.6bn," shrugs Whatley.

Is that the plan with Dubizzle?

He grins; "No. $1.7bn."

The UAE is, of course, just the tip of the iceberg. Dubizzle is gearing up for the summer launch of its Arabic site, which will trigger a rapid-fire rollout of the website across the Arab world. By the end of the year, Dubizzle plans to be in fifteen new cities.

"Everywhere from Casablanca to Muscat," says Butler. "In every capital Arab city and, in some countries such as Saudi, in Riyadh and Jeddah, and in Cairo and Alexandria in Egypt.  The only countries we won't be in are Iraq, Yemen and Sudan - but our goal eventually is to be everywhere. It's a natural progression [because] the population is huge and switched on."This strategy for growth - a steady accrual of cities, each spawning an exact clone of the original site - has the potential to catapult Dubizzle into superstardom. If it can captivate the region's enormous, young and net-savvy demographic, it will have almost total dominance of the classified ads business.

According to Google data, the number of internet users in the Arab World has rocketed from 16.5 million in 2004 to 56 million, as of April 2010. That's a 228 percent increase. For online advertisers - the prime source of Dubizzle's income - those are attractive figures indeed.

"Classifieds is a done deal once you have major market share - the kind we have in Dubai. Once that happens, it's very difficult to topple it because it's a natural monopoly." says Whatley. "It's that chicken and egg problem - people go where the listings are, but the listings go where the people are."

That sort of dominance, previously only seen in the granddaddy of listings sites, Craigslist, would flip open an array of revenue streams for Dubizzle.

"There's this whole other untapped potential of Dubizzle, of allowing users to use the site to promote themselves, to use featured ads if they want. There is a huge market that can't afford to go through an advertising agency," he says.

The site could also weed out businesses that piggyback on its size and success.

"Its is meant to be a consumer-to-consumer website, but we get a lot of businesses. If you can identify between the two, you can charge - but not a huge amount - those who use the site to generate business."

Dubizzle is one of those rare things - a business that has something to thank the recession for. It lit a fire under the site. Overnight Dubai morphed from a city that never looked at the price tag, to one in search of a bargain. In late 2008, as job cuts started to bite, panicked expats flooded the site in a bid to sell off their belongings before returning home. Speculators who had bet their money on the real estate boom, posted thousands of luxury properties at fire-sale prices. And Dubizzle's traffic shot up 400 percent over a four-month period.

"There was an explosion of traffic and listings," says Butler. "Property for rent went through the roof. It was at that time when everyone was flipping properties and then the market collapsed. Dubizzle was the first point of call. Cars," he says, gesturing sharply upwards; "went like that.

"The deals on Dubizzle were crazy; people had a week to leave and sell everything."

If the recession was a bright spot, so too was the Gulf's long overdue interest in digital advertising. Globally, the downturn blew a hole in print advertising revenues, wiping an estimated 50 percent off the value. Revenue from newspaper classified ads has almost halved in the past decade, a drop thought to be around $10bn. Much of this money has been redirected online and sites such as Dubizzle are reaping the rewards.

"Five years ago, we not only had to sell [advertisers] Dubizzle, we had to sell them the internet," recalls Whatley. "Now, we deal with all the major ad agencies. You sell your product not the concept."

"There were huge increases over 2009," adds Butler. "Though the ad dollar shrank, the piece of the pie for online got bigger.

"It's still extremely small here... but now it's rare to find a big brand in the UAE without an online strategy of some sort. Five years ago, it was rare to see one that did."

Dubizzle is on a tipping point, but Whatley and Butler still convey that small-time, parental pride about the site's success. And they are still astonished at some of the things that people will sell through it. "A Boeing 737 - an old one, on sale for $8m from Brazil," grins Butler. "That was weird."

"And when the rental market was crazy, one guy put on a prison cell," chips in Whatley. "I remember the ad; ‘AED300 a month, comes with three hours of activity a day and three meals.' There was even a picture."

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debbie 10 years ago

how can we know that its a success if we dont know how much revenue they make? dubai press is always too quick to crown successes. pssht.