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Monday, February 24, 2014

State of Internet industry

Recently Facebook has acquired the whatsapp for reportedly 19 billion us dollars. This massive figure acquisition has made the silicon based founders of whatsapp billionaire. Both the founder Jan Koum and Brian Acton has become the owner of massive fortunes. According to the estimates the worth of Jan Koum is 6.8 billion dollars while Brian Acton has become the owner of 3 billion us dollars. These new billionaires are the recent example of the possibilities of the cyber world.
Global phenomenon
The sudden rise of billionaires in the internet industry is the first phenomenon of its type. Owing to zero marginal cost in the internet industry, the number of millionaires in internet industry is rising at an increasing pace.
The rise in the number of internet super rich is global phenomenon and for past some decade many billionaires have risen to the scene including the facebook billionaires. Google and yahoo founders were the first internet billionaires. They organized the information present on the internet, and paved the way for future genius to become successful internet entrepreneurs.
Later on billionaires like Mark Zuckerberg (Facebook), Jeff Bezos(Amazon), Masayoshi Son (Softbank), Pierre Omidyar (Ebay), Robin Li(Baidu), Mark Cuban (broadcast), and many others rose to the status of billionaire. As the number of billionaires rose same was the case of millionaires. These online super rich are generally young.
New opportunities for entrepreneurs are arising owing to increase in number of internet users. Internet not only provides opportunities to entrepreneurs but also has become a tool for social change.
Arab spring in the Middle Eastern countries is an example of the change brought by the internet.
Middle East
The Middle Eastern region has recently seen Arab spring. This Arab spring is attributed to the advent of internet technology. Although the society has seen an evolution but number of cyber entrepreneurs is very small. It will take time for many of the Middle Eastern people to enjoy startup spring along with the Arab spring.
The only country that has sizeable number of internet entrepreneurs is Jordan. It has proved itself to be the hub for technology startups of the region. From many of small internet firms to Maktoob, a Jordanian internet portal, were started in Jordan. Maktoob proved to be an inspiration for many young entrepreneurs of the region, as it was later acquired by Yahoo for as much as 175 million us dollars.
Many Middle Eastern internet entrepreneurs want to serve Saudi market, the juicy market of the region, because of its huge population of 28 million. Saudi Arabia is the largest economy of the region and rich consumer base having money to spend along with good internet connectivity. This makes Saudi Arabia ideal market for the regions internet entrepreneurs.
Like Saudi Arabia, other Middle Eastern countries are also close to intense outside competition, owing to language barrier.
Unlike majority of the regions’ countries, Pakistan has no such barrier of language, as Pakistanis can speak and understand English. Thus the large population of Pakistan can prove to be the large consumer base for the internet companies from around the globe. This already has happened in case of Facebook, Google, and many other online companies. Number of Facebook users in the country has already touched the mark of 10 million.
The rising number of internet users can be an opportunity for country’s entrepreneurs. As majority of people who uses internet are from young strata of the society so is the case of internet entrepreneurs.
There are number of success stories of Pakistani entrepreneurs
Investorguide360, for example, is a Pakistani financial portal. It was Asia’s fastest growing financial portal before its acquisition by AMZ MAK Capital Limited. AMZ MAK Capital Limited is a partnership between Aref Mohammed AlZarouni and Mir Mohammad Ali Khan.
The interest by the investors speaks volume about their confidence in the startups. Recently a Frenchman has made an investment in Pakistani real estate portal Zameen.com. The terms of the agreements were not disclosed although the investment in this portal was confirmed by the investor, Gilles Blanchard. Earlier Mr. Blanchard was associated with SeLoger.com as its co founder. SeLoger.com is French leading real estate portal.
The trend of getting foreign investment started when Monis Rahman, founder of Pakistan’s premier online recruiting website Rozee.pk, got first round of investment from Silicon Valley based venture capital funds, Draper Fisher Jurvetson and ePlanet Capital. Today Rozee.pk is used by more than 16 million professionals for their job search and is used by as much as 54000 employers.
Though Monis Rahman was the trend setter by becoming the first venture fund backed entrepreneur, in Pakistan, it was Abid Beli who first successfully started commercial online venture by starting beliscity.com. Later on his site was sold.

As the trend of blogging is increasing in Pakistan, more and more successful startups will surface. Though presently there are many problems faced by entrepreneurs in starting their own hi-tech ventures. One major problem is lack of financing sources as there is no developed venture capital fund industry. Venture capital funds are more likely to invest in new technology companies. It is owing to this reason that venture capital funds have become synonymous to technology financing.
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