ArabianBusiness turns the spotlight on Rupert Murdoch after his acquisition of a majority stake in AlBabWorld
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What's this about Rupert Murdoch moving to Dubai?
Well that isn't actually true. But the Australian-born media magnate will be hoping to capitalise on those who do move here. A Melbourne-based online real estate advertising company, 58% owned by Rupert Murdoch's News Corp, has just snapped up a majority stake in Dubai's AlBabWorld.com - the largest online real estate network in the UAE.
Well if you're into property, Dubai is the place to invest, isn't it?
Indeed, REA Group will be looking to consolidate its position as the world's largest online real estate advertising network. The company currently operates 16 websites in 10 countries and forms part of Murdoch's global empire of media companies and associated businesses. In 2007 the REA Group delivered 77% revenue growth and 83% net profit growth on 2006 results. Market capitalisation is approximately US$685m.
So what did AlBabWorld.com cost?
Surprisingly little, since you ask. The 51% stake in AlBabWorld.com only cost REA Group US$1m. But the company has injected a further US$2.1m of equity in the venture. It also immediately renamed the company propertyfinder.ae - reflecting the brand name of its websites elsewhere in the world. People searching for homes in Australia and the UK will certainly be familiar with the propertyfinder brand. And given the number of hopefuls moving to the UAE from these countries, propertyfinder.ae should prove to be a popular site.
So who's in control now?
AlBabWorld.com founders Michael Lahyani and Leonard Dionisotti will retain 49% of the company through their Swiss Media Group and will continue to operate the business. The acquisition means that Dubai real estate agents and developers now have access to a potential global audience of 7.7 million unique browsers through their website.
The Swiss Media Group? What's that?
Good question. Swiss Media Group publishes a variety of print and online publications in the real estate, bridal and equestrian and watchmaking categories in Europe and Dubai. Its titles include AlbabWorld.com, Se Marier, Equestrio and Swiss Watch Report, all of which have related websites.
And where did REA Group spring from?
It's headquartered in Melbourne Australia, and these guys certainly know a thing or two about starting with nothing. In 1995 the company got off the ground with just US$22,500 behind it - including the value of its computer equipment. The company's founders spent 18 months working from the sitting room of a suburban Australian house and then a garage before finally moving to proper office space. In 2007 revenue reached US$101m. The global online real estate classifieds business is proving to be a cut-throat industry, but REA Group is showing some skill in navigating it.
Could this be the beginning of Murdoch's entry into the Dubai media marketplace?
Well it's early days yet, but anything can happen - nothing seems to be beyond this media mogul. In August, Murdoch's News Corp controversially bought Dow Jones, publisher of the Wall Street Journal.