I-Tech

Earlier this week Yahoo sent out an email to Yahoo Publisher partners (third party sites that display Yahoo cost per click ads). The email says they should expect new pricing adjustments “based on our assessment of the quality of traffic coming” from their sites.

Yahoo (and its competitors) make adjustments to CPC payments out to publishers based on the perceived “quality of traffic.” Supposedly these payments are credited to advertisers, but there is really no way to know. The changes Yahoo implemented appear to make more dramatic adjustments to outbound payments.

The result of the change, say two publishers we spoke to, is a drop in already-low revenue payments.

“I’d describe the drop as annoying, but not devastating,” said one publisher. But he added that “The way they do it is in a total black box and leaves us helpless to improve things. Yahoo gives you ZERO insight into what bad traffic is or looks like so you can do NOTHING to improve the quality of the traffic you bring to Yahoo.”

Yahoo is also saying that in some cases they will increase payments to publishers with higher-quality traffic. The publishers we spoke to about this are skeptical.

More reports from publishers should get to us over the next few days, and we’ll update this post with new information.

The email is below:

Quality-based pricing is an important component of our goal to deliver high-value traffic to our advertisers, a high-quality experience for users, and long-term success for our distribution partners.

On September 9, 2009, Yahoo! upgraded the quality-based pricing system which adjusts advertiser click charges based on our assessment of the quality of traffic coming from sources within our distribution network. The new version of quality-based pricing may result in discounts being applied across more keywords, and/or deeper discounts for lower-quality traffic. Additionally, for the first time, it may also result in a pricing premium for higher-quality traffic. This enhancement will affect our Sponsored Search and Domain Match traffic only.

If you have any questions regarding this upcoming change, please contact your account representative.

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Yahoo! to Extend Reach to Millions of Consumers in the Arab World; Signs Definitive Agreement to Acquire Maktoob.com
Combination of local expertise and global scale to provide best online experience for consumers in the Arab world and platform for advertisers in the region
SUNNYVALE, Calif. and DUBAI, Aug 25, 2009  – Yahoo!  today announced it has entered into a definitive agreement to acquire Maktoob.com, the leading online community in the Arab world, with more than 16.5 million unique users.
"This acquisition will accelerate Yahoo!’s strategy of expanding in high-growth emerging markets where we believe Yahoo! has unparalleled opportunity to become the destination of choice for consumers,” said Yahoo! chief executive officer Carol Bartz.

"Access to information and communications tools can positively impact people’s lives in many ways, and with the acquisition of Maktoob.com and our investment in the region, the Arab world will soon get a Yahoo! experience in Arabic with relevant local language content, programming and services.”
Internet users in the region will benefit from the combination of Yahoo!’s popular products and services  with Maktoob’s compelling local content, which today reaches one in three people online throughout the Arab world.

This acquisition will extend Yahoo!’s current offerings by adding capabilities to deliver relevant Arabic-language content and services, as well as Arabic versions of Yahoo!’s popular Yahoo! Messenger and Yahoo! Mail services.  Maktoob.com is accessed by users in countries that include UAE, Jordan, Kuwait, Egypt and Saudi Arabia.
“Yahoo! and Maktoob are natural partners and this combination should help energize the Internet market in the region as a whole.  We are excited about Yahoo! building a stronger presence in the Middle East and bringing its compelling suite of services to Arab users in Arabic," said Samih Toukan, Founder of Maktoob.  
While Internet usage in the Middle East has grown more than tenfold since 2000, most markets are still in the early stages of adoption. According to the World Bank, there are more than 320 million Arabic speakers worldwide, while less than one per cent of all online content is in Arabic.  
With Yahoo! and Maktoob.com’s combined audience and platform, advertisers will have access to the reach and sophisticated targeting capabilities they need to effectively engage with the region’s online consumers. 

Spending on online advertising is expected to grow by 35 – 40 percent this year in the region, according to Madar Research.
"Internet users in the Arab world will have access to Yahoo!’s vast content portfolio,  as well as world-class communications products, which will be available in Arabic for the first time. 

In addition, advertisers will be able to leverage the vast reach of the newly combined audiences to effectively market to consumers across the region," said Ahmed Nassef, general manager of Maktoob.com.
Maktoob.com was founded in 2000 by Samih Toukan and Hussam Khoury as the world’s first free Arabic/English web-based email service, and since then has grown to be the leading Arab online community in the region.
“Yahoo is acquiring Maktoob.com for the strong brand and audience it has built over the last nine years and the passionate team they have assembled, which we believe is the strongest in the region,” said Keith Nilsson, senior vice president, Emerging Markets, Yahoo! 

“We see great growth potential in both audience and advertising in the Arab world and combining with Maktoob.com will allow us to quickly build our presence there with high quality products. This is a big win for publishers, advertisers, and consumers in the region.”
This acquisition is part of Yahoo!’s larger strategy to grow its business throughout the world’s emerging markets by connecting consumers with the content and services that matter most to them in their local language. 

The company’s Emerging Markets business group, headquartered in Singapore, is responsible for Yahoo!’s fastest growing markets such as South East Asia, India, Latin America, Africa, and the Middle East. 

Yahoo! has a strong track record of delivering great Internet experiences and helping fuel Internet adoption through partnerships with local developers and content providers.  
Following the acquisition, Maktoob.com will become a wholly-owned subsidiary of Yahoo!.  Ahmed Nassef, the current general manager of Maktoob.com, will continue to lead the Maktoob.com teams and will report to Keith Nilsson. 

It is expected that the transaction will be completed in the fourth quarter of 2009.
Upon completion of the deal, the remaining Maktoob Group companies – including Souq.com, cashU.com, Araby.com, and Tahadi.com – will operate under a new entity called the Jabbar Internet Group, managed by Samih Toukan. 

Yahoo! and the Jabbar Internet Group will continue to have a strong commercial relationship going forward, which will include the promotion of Jabbar companies on the Maktoob.com portal.
Financial terms were not disclosed.
About Yahoo!
Yahoo! Inc. is a leading global consumer brand and one of the most trafficked Internet destinations worldwide. Yahoo! is where millions of people go every day to see what is happening with the people and things that matter to them most. Yahoo! helps marketers reach that audience with its unique and compelling advertiser proposition. Yahoo! is headquartered in Sunnyvale, California. For more information, visit http://pressroom.yahoo.com or the company’s blog, Yodel Anecdotal (http://yodel.yahoo.com).
This press release contains forward-looking statements that involve risks and uncertainties concerning the proposed transaction (including without limitation the statements contained in the quotations from management in this press release), as well as Yahoo!’s strategic and operational plans and expectations for market growth. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the possibility that the transaction will not close or that the closing may be delayed, the anticipated benefits to Yahoo! and its business customers, advertisers and publishers might not be realized; risks related to Yahoo!’s international operations; and risks related to the integration of international acquisitions. More information about potential factors that could affect Yahoo!’s business and financial results is included under the captions, "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations," in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, which are on file with the SEC and available at the SEC’s website at www.sec.gov.
About Jabbar Internet Group
Jabbar Internet Group (www.Jabbar.com) is a group of leading Internet companies in the Middle East region. The group includes Souq.com, the first and leading auction and marketplace website in the region; cashU.com, an online payments company; Tahadi.com, the Arab World’s first MMO online games destination; Araby.com, the first Arabic search engine and E-marketing, the region’s leading online advertising network. For more information please contact info@jabbar.com.
Media Relations Contacts:
Kim Rubey, Yahoo! Inc., (408) 349-8910, krubey@yahoo-inc.com
Cameron Craig, Yahoo! Inc.: (+65) 6279-7336, ccraig@yahoo-inc.com
Rama Alsayegh, Memac Ogilvy & Mather: (+971) 4-3050306, rama.alsayegh@ogilvy.com
Investor Relations Contact:
Cathy La Rocca, Yahoo! Inc., (408) 349-5188, cathy@yahoo-inc.

http://business.maktoob.com/20090000367722/RELEASE_Yahoo!_Maktoob_acquisition/Article.htm

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A new Arab Advisors online survey of Jordan Internet users revealed that international web email providers are the most popular amongst Internet users where 79.1% of respondents use Yahoo and 69.5% use Hotmail as their email account provider. When asked about which chatting software/website they use, 61.6% of respondents reported using MSN Messenger. Yahoo Messenger ranked second with 54.6% of respondents.

Arab Advisors said in a press release that survey respondents were randomly targeted by receiving an email shot in their inbox to ask them to fill the survey in cooperation with major online players in the region. To entice respondents to fill the survey, there was a prize of 300 US$ in a raffle. The survey results encompass answers from 555 respondents and yields a confidence level of 99% with a margin of error of less than 6%.

“Arabic was the preferred language for reading and listening on the Internet amongst respondents. However, English was the preferred language for writing on the Internet. Preferences for languages other than Arabic and English lag far behind.” Noura Abdulhadi, Arab Advisors Senior Research Analyst said in the press release.

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