Yahoo to launch Arabic portal with Arab partner

A Yahoo! sign is seen in New York's Times Square November 18, 2008.

DUBAI (Reuters) - U.S. internet powerhouse Yahoo said on Tuesday it is acquiring Maktoob.com, one of the Arab world's largest online portals, in a bid to tap into the Arab region, making Yahoo available in Arabic.

Yahoo has around 44 million users in the Middle East and North Africa region per month, Keith Nilsson, senior vice president, International Emerging Markets, told reporters.

"We think this region is just beginning to take off and that there will be an acceleration of internet penetration, more users and advertisers in the coming years, so we plan to invest more in the region," said Nilsson.

Yahoo's arch rival Google Inc already provides an Arabic language service.

It was not clear if the deal, for an unspecified value, would involved Yahoo censoring Internet content.

"We understand the sensitivities around cultural norms (in emerging markets) and think the Maktoob team has done a good job by abiding to those," Nilsson said, adding Yahoo "complies with local laws" in terms of service and privacy policies.

"We plan to continue to take the same approach."

Yahoo helped the Chinese government identify Shi Tao, a reporter accused of leaking state secrets abroad who was jailed in 2007 for 10 years.

Google Inc. launched a self-censoring Chinese site. Web communications firm Skype filtered and recorded text messages.

Etisalat landed in hot water in July when Blackberry maker Research in Motion said a software update sent to users by the United Arab Emirates telecom firm Etisalat, draining batteries, was in fact an unauthorized surveillance application.

Jordan-based Maktoob.com gets 16 million Arab users per month, said Ahmed Nassef, general manager of the firm.

The region has about 45-50 million online users from North Africa to the Gulf. "That number is increasing year-to-year by 30 percent on average so the potential is incredible," said Nassef.

UAE private equity firm Abraaj Capital bought a 40 percent stake in Maktoob in 2005, in a deal that estimated the portal's value at 10 million dollars, before selling it in 2007. Abraaj said it had made a 75 percent return on its initial investment.

Hussam Barhoush, a technology sector analyst at Arab Advisors Group in Jordan, said the Yahoo-Maktoob portal will try to tailor content more toward the Arab region than its Google rival, which has a more global focus.

(Editing by Andrew Hammond and John Stonestreet)