Chairman and ceo of Jabbar Internet Group, a leading company investing in booming internet businesses across the region with a focus on consumer e-commerce, Samih Toukan, along with Hussam Khoury, also established Maktoob, the world’s first Arabic-encrypted email service provider. But Maktoob was not enough for Toukan’s ambitions, especially after being engulfed by Yahoo. He wanted to institute the largest auction and marketplace in the region (souq.com), the first Arabic search engine (araby.com), the leading alternative online payment solution (cashu.com), a private sales club (sukar.com), a traveling booking agency (joob.com), and games’ site (tahadi.com). And that is exactly what he did; all under the Jabbar umbrella.
Maktoob began in 2000 as an experimental project providing the world’s first Arabic email service. Over the course of a decade, Maktoob became the world’s most popular Arabic-language online community with over 16.5 million users, spreading the usage of Arabic on the net. Following its multi-million dollar acquisition by Yahoo, Maktoob became one of the first internet success stories in the region.
How close was this outcome to your vision of Maktoob during its earlier years?
To be honest, very close. Initially, when we launched Maktoob back in 2000, we were not planning to sell it. Yahoo at the time was the biggest player on the internet. There wasn’t Google or Facebook so Yahoo! obviously contributed a lot to our vision, indirectly of course, because we didn’t have a relationship with them then. Although we started as an email provider in Arabic we eventually became modelled more or less like Yahoo! with our variety of services, content, news, our focus on online advertising and so on. The way the company was run was very similar in those terms to Yahoo!’s operation which explains why Maktoob and Yahoo! were a good fit. So I wouldn’t say it was planned, but the vision did coincide.
At the time all sorts of Arab-specific obstacles presented themselves, which eventually made way for the radical success of a fully-fledged online Arab community. What are some of the key solutions that comprised the core of Maktoob?
Our focus at the time was on Arabic email and although our competitors provided other services such as news and content, we refused to do anything else. After the first three years, we began introducing new services. You can’t do everything at once, so in the beginning it was important for us to have a core service that was strong. In our case people needed the Arabic email. Even after the acquisition some people still thought of us as an email solution, although we did introduce many other successful products and services. As a result, one innovation was the first virtual keyboard for users who did not have access to Arabic keyboards. We would even send out Arabic-lettered keyboard stickers as a free service to our users in the US and Europe. I think that helped a lot in creating Maktoob’s essence and the image that it spread very quickly.
Following the acquisition of Maktoob, internet users in the Arab world benefited from the combination of Yahoo! and Maktoob’s popular world-class products and services in Arabic for the first time. The acquisition accelerated Yahoo!’s strategy of expanding in high-growth emerging markets but what did this mean for you?
I am always asked about the benefits following the acquisition. It’s a very important question as some people have doubts about why we sold Maktoob. There are benefits for Maktoob’s employees, Yahoo!, and most importantly, for the industry as a whole. Key issues to consider here include the effect of the acquisition on the industry, entrepreneurship, and on future investment. I will discuss each one separately.
First of all, we should assess the benefits for Maktoob’s employees. Although we were a small company that eventually grew, we did not have the same resources of a global company like Yahoo! or Google. Maktoob employees today benefit from greater resources invested in the company in terms of content, development, and training. We were a local company which eventually became regional, but Maktoob employees today interact with people all across the world which gives them access to the latest technologies, business practices and so on. This definitely raises the bar for them. I’m not going to talk about Yahoo because they obviously benefited by targeting a larger market via access to the Arab world.
As for the impact on the internet landscape as a whole in the region, this represented an example of a successful global player investing in our region. Just recently, Yahoo announced that the Yahoo! Maktoob homepage has topped the charts at number three in the world following US and Taiwan. This means a lot because it places the whole Arab world on Yahoo!’s online map, whereas before India, China and Eastern Europe were sole priorities. They are still, but the Arab world has joined all of a sudden, coming in number three in terms of traffic. This is a major milestone and has clearly made an immediate mark on investment because now global investors will become more interested in the region. They can now trust regional investment more upon seeing that another global player has come in. We were hoping local and regional investors would invest their money in technology but they have been slow to do that. Hopefully this will set an example for them to start investing money in the region.
Last but not least, this creates the belief that entrepreneurs can achieve something in the Arab world. You would not believe the flow of emails I receive on a daily basis from entrepreneurs who have a powerful vision and good ideas, who are seeking investment, or looking for mentorship. These emerging entrepreneurs look up to our model as a successful case study so I think overall the acquisition has been a great deal and I can envision the long-term effect it will have on the region.
What concerns did you have with Maktoob.com becoming a wholly owned subsidiary of Yahoo! and what strategic goals were placed to avoid them?
I think one of the things that attracted Yahoo! to Maktoob was that Maktoob was built on a very strong team of employees; it wasn’t based on Samih or Hussam, although we started the company and played a major role. Maktoob was very institutionalised and professional. So I would say the risk for Yahoo! was minimal. However, there is always a risk. For me, the risk I was concerned with was more along the lines of an American company coming into a regionally based company, so it was more culturally related. Maktoob was in the business of prime content so obviously there were political and cultural issues that I was concerned with. You cannot run the same content in Saudi Arabia as Jordan: you need to understand the local sensitivities in each place. Clearly this was a challenge for Yahoo! however I think Yahoo! played their part well and reduced their risks by believing in and keeping the local team who understood the region. This highlights the importance of what I was saying earlier about building strong teams. My advice to companies always is to focus on that because a strong team is ultimately what a successful company is all about.
The acquisition extended Yahoo!’s products and services to Arab internet users by adding capabilities to deliver relevant Arabic-language services as well as introducing Arabic versions of Yahoo!’s popular Yahoo! Messenger and Yahoo! Mail services, to name a few examples. In your opinion, how successful has Yahoo! been in maintaining Maktoob’s primary identity?
I love the Maktoob brand; it was my baby. At the same time I view this as a whole package deal. I understand Yahoo! is a global company with a defined brand strategy which needs to identify with the centrally controlled Yahoo! standards. I see where Yahoo! is coming from. Of course I would like to keep it as Maktoob but I am happy with what Yahoo! has done by naming it Yahoo! Maktoob, which actually resembles the whole relationship. What is essentially important is what makes up Yahoo! Maktoob’s content: their products, and the innovation behind their team.
It is only expected that the Maktoob takeover has set the stage for the region’s rising generation of net entrepreneurs. With a growing emphasis on creating more successful media companies, what has been done to encourage and support internet ventures across the region?
It has only been a year and a half since the deal. A lot could have been done but also a lot has been done. Although there has been an increase in initiatives and funds here and there, again, we need more investment. The Arab world is rich, yet it differs from one country to another, and unfortunately not enough is invested. So I am always pushing for more, though we do not have that ecosystem. However, in Jordan a few organisations such as Oasis 500 and Meydan have been set up to support entrepreneurs and help them get started.
When we first launched Maktoob, a lot of people did not believe in its potential, now they can refer to Maktoob as a success story. If anyone laughs at them, they can say “Look at what Maktoob did, we can do the same.” The notion of putting people down and not believing in them – it’s there - entrepreneurs fight it but we need to support them with the right mentorship programs.
With many U.S. companies putting their investments on hold during such a financial crisis, Yahoo! went ahead and acquired Maktoob.com. What does this indicate for Arab entrepreneurs?
As I said, the acquisition of Maktoob was a great sign at the right time indicating the importance of targeting the Arab region. During the years prior to the acquisition, I talked to many international companies; the Arab region was not their primary focus. At the time regions such as Asia and Eastern Europe were their priorities. What we managed to do was to highlight the potential and importance of the Arab market. With 350 million people across the Arab world, the region is very sizeable. It’s not India or China but it is a third of China or India, making it quite a large market. With Yahoo! entering the game, even with the on-going financial crisis, this posed a strong message to entrepreneurs and investors. It is not just about setting up a company and then selling it to a foreign company. For me the success of Maktoob after the deal is more important than before the deal.
How do the individual products and services provided at Jabbar Internet Group come together to form the focus of Jabbar?
We inherited some of Maktoob’s valuable assets such as souq.com, tahadi.com and CashU which Yahoo! didn’t take because they are not advertising based. Except for Ikoo, everything we have is e-commerce. Our aim in Jabbar is to build the largest e-commerce company in the Arab world. E-commerce entails a broad definition; in our case, we are focused on online consumer retail products. For example, on joob.com we sell airline tickets, on souq.com we help sellers and merchants sell their products, on sukar.com we sell fashion products, on cobone.com we sell daily deals, while CashU provides a secure online payment service. We are trying to create what Amazon did in the U.S. and deliver this experience to the Arab world.
A survey that revealed that only 13 per cent of internet users were willing to use their credit cards online gave birth to the concept of CashU, your prepaid internet payment service. Why then do you think many Arab users were initially resistant to this service and what business strategy was laid down to gain a growing base of subscribers?
I don’t think the problem was resistance to CashU as a service. CashU is a good solution because you have zero or very little risk; it’s a very safe online payment method, which makes it even better than using credit cards. The concept of an alternative payment method to credit cards exists and people like it for reasons such as safety, convenience and so on. However, I think the issue with CashU, which is being solved with time, is coverage. You can use a MasterCard or Visa pretty much anywhere you go, but with CashU time is still needed for growth, though it is growing fast and will be a major online payment method in the years to come.
Ikoo, the leading advertising network in the Middle East and North Africa serves an impressive 1.4 billion monthly impressions to over 39 million users across Arab-speaking countries. In your opinion how successfully have brand managers across the Middle East adapted to digital communication?
Today I cannot imagine a good company that doesn’t have a digital strategy, it doesn’t make sense to me, but obviously they do exist. Clearly there is some resistance from traditional companies to embrace the digital era but for the ones that do, they are going to gain a strong advantage over others. I think I have realised this from day one, back in 2000 when almost no one was using the internet as a marketing communication medium. However, things have changed. Now almost everyone is using online mediums and social networks such as Facebook and Twitter. Digital communication as a media platform is clearly just at its beginning.
How would you define the relationship between the digital medium and the physical location of an e-commerce company?
In Maktoob, we were mainly located in Jordan with offices in Amman and sales offices in Dubai, Cairo, Riyadh, and Kuwait. However with Jabbar, we are physically located in several countries in the region. Not all our companies are in Jordan. In e-commerce, you have to be on the ground because it is very customised to the local market, which entails strong relationships with the sellers and buyers on location.
In a region where governments are particularly concerned with media censorship how have you succeeded in bridging the gap between meeting the demands of a prolific online media company and the restraints of traditional political system in a medium that is almost impossible to control?
It has been tough but I think this is one of the challenges that we managed very well. The dilemma you have is that you cannot have a controlled medium on the internet. If Maktoob was fully controlled, we would lose the users. At the same time, there are limits in the Arab world so you need to play it right. We were more of a democratic platform compared to other traditional media outlets, so people liked us. You need to test the boundaries and push them a little, but if you go too far you could get blocked in some countries so it’s important that you strike a balance between how democratic you can be while understanding how it differs from one country to another. This was definitely one of our vantage points. I think one of our services did get blocked once or twice in some Arab countries. The revolutions that took place with the help of the internet indicate the importance of the online stage. Simply, if you don’t offer people a free and democratic platform, they will go elsewhere.
Unquestionably, communication technology is the most manifest aspect of globalisation. While the positive forces of internet technology on globalisation are evident, what are some of the negative impacts of the internet on globalisation and how can they be minimized?
Every medium has its positive and negative factors. I think the positive aspects of the internet overcome the negatives. That is not to say that the negatives are not there and they range from being addicted to the internet, losing all forms of human communication, security issues, inappropriate content that could be exposed to children, credibility issues, and so on, but these issues exist offline as well. I think these issues present opportunities to create solutions, which many businesses have come forth with like we did with CashU, which was solution to credit card fraud.
While adopting existing ideas and making them relevant to the Middle East clearly there is a fundamental need to stay ahead and keep innovating. How do you manage to keep pace with the highly unpredictable exponential development of the global online community?
No other industry in the whole world has moved at such a fast pace like the internet. Groupon, which is only three years old, is a multi-billion dollar company and is one of the fastest growing businesses in the history of the United States. Obviously, you have to move at a quick pace and stay up to date and connected with what happens around you. What takes place in the US or Europe will also occur in our part of the region as well even if there is a delay. If you don’t offer people a local service as good as the international service, they will go elsewhere so not only do you need to offer them Arabic content but a comparable level of service which is what we are trying to do in e-commerce. I am not saying that we are there but we know what needs to be done. Customer service and online experience needs to be as good, prices need to be as cheap, and security issues need to be taken into account. Even when we first started Maktoob, people didn’t trust our products at first. With time we built that trust. You need to compete on a global level; you cannot think you are local. Today that is possible, and we proved it with Maktoob.
Where do you envision Jabbar Internet Group in the upcoming decade?
With Maktoob, it took a decade but at the time we were the only ones. People didn’t believe in what we were doing, we didn’t have the right investment at the start and the right environment had to be created. What will happen in the market in the next 2-3 years is going to reflect what happened in the last decade. The next success story is not going to take that long. Just recently, another American company Living Social acquired one of our competitors in the U.A.E. called GoNabit. The industry is moving very quickly. Already in a year and a half, Jabbar is as big as Maktoob in terms of revenue and employees. Time is compressed now. What we want is not to create one Maktoob but to create tens or hundreds of Maktoobs.
The price of achieving greatness is failure, which ultimately means accepting failure as a constructive aspect of the journey to success. What key lessons has failure taught you over the years in creating a thriving media company?
I don’t like calling it failure, it’s experience rather. Everyone fails. Sometimes you look at a successful company as it is portrayed to the outside world. What they’re not telling you is how much time and effort they spent, how many times they failed and how many things they tried. Nokia for example began as a tire company, it wasn’t set out to be a phone company so obviously at one point they failed as a rubber company and continued as a telecommunication company. You fail and you come out stronger because you have learned, but some people fail and they give up. If you fail and give up, that’s it for you but if you fail and you say let’s do it this way or let’s try something else you will succeed in the end. So really, it’s not failure, but experience. Many employees working for companies in the U.S. ho have failed before they succeeded are very much in demand because of what they have learned; businesses want to hire those people. Now if you keep failing many times in a row and you keep repeating the same mistake, that’s a different story.
Behind every high-profile success story is a strong message. What is your message to the rising generation of entrepreneurs in the Arab world?
I’m going to give more than one message. We just spoke about failure, which is an important message. Don’t be afraid of failure, go for it. Do what you are passionate about, and then it’s not called work. Of course when you are in need and you need to work that’s a different story, but if you have the choice between doing something that you are passionate about and doing something that you are not passionate about even if it pays more, go for what you are passionate about. In the long run, it will make you happy. And when you’re a happier person you’re going to innovate more and you’re going to be successful. I think then you’ll make the money you’re looking for. Some people are just going after the money, which is not right. Some entrepreneurs start companies and they’re thinking how do I sell it in two to three years, that’s the wrong way of thinking. You should be thinking of how to innovate and how to make this a big and successful company, money will come in the end. It’s not all about money; it’s about achievement and building success.
