Middle East web entrepreneurs can take it easy for now

Facebook has more than 75 million users in the Middle East, the level of regional spending on digital advertising is still minuscule. And minuscule it will remain, for the time being.

Big companies, like big celebrities, hire big bodyguards - which is why the big cheeses at Facebook, now valued at US$50 billion (Dh183.66bn), have rather beefy security arrangements.

When Randi Zuckerberg, the sister of the social networking site's founder, Mark, gave an address at a conference in Dubai last October, her bulky security escort was an illustration of how new media companies, despite their "cool" credentials and liberal working practices, have truly entered the corporate arena.

Ms Zuckerberg, who is Facebook's official spokesperson, revealed at the Dubai conference that 15 per cent of the site's user base is in the Middle East, including about 2 million users in the UAE.

Unfortunately, Ms Zuckerberg was ushered off by her burly bodyguards before she could be pressed on a more pertinent question: if one in six Facebook users reside in the Middle East, does that mean the company derives a similar proportion of its revenue from the region?

It would be safe to hazard a guess that the answer to this question is a resounding "no". For while Facebook has more than 75 million users in the Middle East, the level of regional spending on digital advertising - Facebook's primary source of revenue - is still minuscule.

And minuscule it will remain, for the time being. Digital media currently attract just 3 per cent of total ad revenue in the MENA region. Elie Aoun, the chief operating officer and the local managing director at Ipsos MediaCT, which tracks advertising spending, said recently that he expected digital to "remain insignificant compared to other media", expanding its market share to just 4 per cent this year.

But to justify its $50bn valuation - which is 25 times the site's revenue for last year - Facebook is clearly on the lookout for growth markets for its advertising sales operations.

It is hard to imagine the company will ignore the relatively untapped Middle East market in this mission. As Ms Zuckerberg said, the region "has a substantial amount of our user base, so there are plans in place for us to [focus] more heavily in the region".

This will be good for the market as a whole. Facebook ranks as the second most-visited website in Egypt and the fourth in Saudi Arabia, according to the internet traffic monitor Alexa.com.

If such a dominant player pledges to expand its advertising revenue in the Middle East, this will undoubtedly be good for the market as a whole. Facebook could prompt a change in mind-set among Middle East advertisers, which would benefit dozens of homegrown social network sites as it would signal greater spending across the region.

But in a media market dominated by television, radio and print, this will take time. It is unlikely that Middle East web entrepreneurs will require their own bands of burly bodyguards just yet.