BuddeBlog

Growing Internet penetration and disposable income across the Middle East has spurred e-commerce development; Gonabit, the Middle East’s first group-buying website has operations in Oman, Bahrain, Egypt, Jordan, Lebanon, Kuwait, Qatar, Saudi Arabia and UAE.

Founded in 2010, the startup has applied the group buying business model to the Middle East, relying on social media to share deals and generate publicity.

See also:

Digital Economy – E-Commerce and M-Commerce Insights

World Digital Economy – E-Commerce and M-Commerce Trends

In January 2011 the laying of a new submarine fibre optic cable between Cuba and Venezuala commenced. The cable is expected to triple Cuba’s overseas phone connections and data transmission speeds. This is significant for Cuba, where despite the growing awareness of the Internet among the Cuban populace, public Internet access is still limited. Broadband services, such as ADSL and cable modem, are non-existent in Cuba, and until mid-2008 Cubans could not legally buy a computer or subscribe to an Internet connection without having a government permit.

Meanwhile mobile penetration continues to be rated by the United Nations as the lowest in Latin America. Although mobile subscriber growth of around 50% was posted in 2010, largely attributable to the Cuban government’s decision to make mobile phones more accessible to citizens, nevertheless the substantial gap between Cuba’s mobile penetration, which stands at around 10%, and the rest of Latin America’s, which averages around 90%, continues to widen.

 For more information on the Cuban telecommunications markets see Cuba – Telecoms, Mobile & Broadband.

While social networking services such as Facebook have become competitors for the online advertising dollar; the market leader Google has not stood still. In fact Google relies on advertising so much that it was reported that 97% of its’ 2009 revenue originated from advertising ($22.8 billion); with the majority of this via their AdWords service. As a result, Google continues to improve upon AdWords features and services, and in November 2010 it launched Call Metrics. Call Metrics allows users to track calls made from ad displays directly to the retailer. CallMetrics will monitor the number of VoIP calls made by clicking on applicable display ads, and it will record the time of call, duration and area code. Google is also moving more and more into the mobile advertising sector with it’s purchase of AdMob.

Table 1 – Google advertising revenue – 2009; 2010

(Source: BuddeComm based on company data, 2011)

Note: Overall advertising revenue from all mediums.

For further information, see separate report: Digital Media – Google and Internet Media Insights

An interesting observation was made recently by a colleague of mine, Vincent Dekker, a leading Dutch ICT journalist at the Trouw newspaper.

He was writing about advertising revenues, and, while he used the Netherlands as an example, his point has global relevance.

The enormous success of Google and other international (American) Internet services is creating a big problem for newspapers, since advertising is a key source of revenue for these organisations.

While Google only gets a percentage of the revenue on its ads on, for example, the home pages of newspapers, it gets most of its advertising revenue from ads next to its search results, for which it receives all of the revenue.

In the first half of 2010 (the most recent figures available – data from Nielsen) 54% of all web ad revenue in the Netherlands went to Search in the Netherlands Search=Google (some 94 % of searches)

Google is now also targeting Display (with 13% of market share already in the USA). Facebook is also targeting Display, and it is just beginning to capture market share in the Netherlands.

All Dutch news sites and Facebook’s competitor Hyves together had 205 million Euros in display revenue in 2009. That is half of what Google made, and it will become less as soon as Google and Facebook get going in the Dutch Display market.

The biggest Dutch news site, Nu.nl, claims it makes a profit but Vincent indicates that this is not going to last. Soon All Dutch news sites will lose money, no matter how big they are.

These developments could become a threat to the plurality of the media and that’s not something a democratic world should look forward to.

Here is the original article (in Dutch): http://www.trouw.nl/tr/nl/4324/Nieuws/article/detail/1838132/2011/02/09/Zoekmachine-is-geldmachine.dhtml

Of course, having said all of this the discussion comes back to the future of the traditional newspaper.

Today’s media originated back in the 17^th century, a totally different era. Are new forms now going to replace that traditional format, and can plurality of the media be maintained through these new formats? There is obviously no clear answer to this yet, but protecting the old media through artificial regulation might not be the right way forward either. At the same time the current alternatives with blogs and social network sites doesn’t yet provide the media plurality that is needed for a well informed democratic society..

See also:

Rupert’s iPad adventure will fail

Glimpses of a new e-publishing revolution

China’s Internet Network Information Centre (CNNIC) statistics release in early 2010, show that the nation of 1.3 billion people now has 457 million broadband users, more than the US, Mexico and Canada combined.

Going into 2010 there were 303 million mobile internet users in China, up 69.3 million from 2009. Mobile internet users accounted for 66.2% of total internet users, up from 60.8% at the end of 2009. The number of rural internet users reached 125 million, or 27.3% of total users, an increase of 16.9%. The numbers don’t add up because some households have multiple connections.

The Chinese are spending billions to build out better mobile and wireline broadband. Only 23% of Chinese families have internet access now, so China still has huge potential in this industry. Under China’s twelfth Five-Year Plan (2011-2015), the Chinese government will focus on developing the telecommunications infrastructure with total investments reaching RMB 2 trillion. Broadband development would account for 80%.

China Telecom has ambitious plans to triple the number of users for its fibre-optic broadband service in 2011 to reach 30 million. The company further aims to grow the user base to 100 million by the end of the Five-Year Plan by having installed a fibre optic network that covers all the family, government and enterprise users in the cities of southern China.

China Telecom officially launched the “Broadband China Optical Network City” project on in February 2010. China Telecom plans to cover every city in China with the fibre broadband service in three years and convert all copper lines to fibre. The company will follow the government’s policies to improve infrastructure and cooperate with local authorities to integrate telecommunications, television, and internet networks. China Telecom further plans to introduce cloud computing and ‘internet of things’ services, more internet applications for mobile and fixed internet users, and to accelerate its transformation into a comprehensive telecommunications provider.

By end 2015, full 3G network coverage will be achieved and WiFi will cover the hotspot areas. This will mark the completion of the integration of wired and wireless high-speed broadband networks and provide ubiquitous and seamless coverage of broadband services.

For information relating to the telecommunications market in China, see: China;

Lisa Hulme-Jones: BuddeComm Senior Analyst