In the aftermath of the Arab Spring, media companies are rushing to build the architecture to support the new demands of a media-hungry and media-savvy population that has been relatively starved and ignored up till now, reports Frank Kane in The National.
Basil Moftah and Russell Haworth have just pulled off something of a coup in the Middle East Internet space.
The two executives run the regional arm of Thomson Reuters (TRI), a global information conglomerate. This week they picked up Zawya, probably the region’s best known business Web site, for about $40 million.
There were others in the bidding, including the Financial Times owner Pearson, as well as Emap, a British company that owns the Web site AMEinfo based in the UAE. But Thomson Reuters got it—not exactly for a steal, but for less than some in the market had suggested.
"For us it was a strategic deal," says Moftah. "It will get us into the middle section of the market pyramid and open up a new customer pool to us. And it will pay for itself pretty quickly if the oil price and the flow of money in the region keep up. That will persuade businesses and governments that they need that type of local business information."
Both men agree the Arab Spring has set off a surge in demand for online information in the Middle East. "The people who are using the Internet now are not going to go away and they don’t just want news, they want information of all kinds. That’s where Zawya will come in. It’s a great aggregator of accurate content in a region where not all financial information can be relied on," says Haworth.
He sees Zawya fitting in with Thomson Reuters’ other products, such as the legal information service Westlaw Gulf, the Eikon information and trading system, as well as its foreign-exchange dealing platform. These services are the big payers for Thomson Reuters, with thousands of customers across the world paying premium rates to use them.
Zawya, at an annual minimum subscription of $7,000 for its 5,000-plus subscribers, is cheaper. But the plan is to further extend the services Thomson Reuters provides in the region.
"Thomson Reuters is a natural leader in the information business because of the breadth of clients we serve. Scale matters in this industry and we have it. Others struggle to attain this breadth," says Moftah.
The pair see value in the Zawya brand name, and will not be changing that any time soon. But there will be a "progressive integration" of Zawya’s 200 or so staff (mainly in Dubai and Lebanon) into the Thomson Reuters organization.
"The Reuters people are already asking lots of interested questions about how Zawya will link through to their daily work, and I think the Zawya people are very excited. They like the idea of being part of a larger organization, and there is a lot of appetite from them to capitalize on Thomson Reuters assets," says Haworth.
"We’ve already invested in Zawya quite significantly with the acquisition, and we’ll continue to do that. We’re looking for people who can help grow it to the next level of performance," he adds.
But one Zawya executive who will not be involved in the new set-up is Gunnar Skoog, who was chief executive when the business was owned by the private-equity group Saffar and other founding shareholders.
"The role of CEO is no longer appropriate. One of our own people will run it on a day-to-day basis, Antonio De Gregorio, who’s been with Reuters ten years and running our commercial side in the UAE since 2008," says Haworth.
One focus for investment and expansion will be in Arabic-language news and information. Reuters already offers an Arabic-language news service, but this will be extended to business information and archive information under the new regime at Zawya.
"We think it’s appropriate for content on, for example, Islamic finance to be in Arabic and regard that as high value-added information. At the end of the day, doing business in any part of the world has to be in the local language," says Moftah.
Thomson Reuters has been in the Middle East since the news service opened in Egypt in 1856, and it believes its lineage in the region gives it advantages in navigating the sometimes difficult media scene. "We’ve always enjoyed a trusted relationship with governments and regulators here, partly because we’re a global organization and partly because we’re Reuters," says Moftah.
"Of course, we always obey the rules and regulations, but anybody out there will be more cautious about putting pressure on us. There have been instances but we’ve always stuck to our principles," he adds.
The global business information market is now dominated by three big players: Thomson Reuters, Bloomberg, and The Wall Street Journal/Dow Jones combination owned by Rupert Murdoch. There has been recent speculation that the Financial Times Group might fall under the ownership of Thomson Reuters or Bloomberg.
On this subject, Moftah is intriguingly non-committal. "We got out of the print media a long time ago, but have a great relationship with the Financial Times already. We’re always looking for the best content and information, and if somebody at group level thought that was interesting, I guess that may be so."
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