Facebook looks for gold in the Middle East

Posted on May 25, 2012


Image representing Facebook as depicted in Cru...

Facebook’s decision to open an office in Dubai was reported at low decibels but is expected to add a significant chunk of dollars to its annual revenues.

Research shows that Facebook has more than 39 million users in the Middle East and North Africa region. If by its own reckoning each user is valued at USD 5 per year, this implies potential revenues from the MENA region of USD 198.15 million each year.

But that’s not the end of it. At 39.63 million users, average penetration into the MENA population is just 27.18%. Compare this to penetration into the US market of 50.55%, the highest in the world, and you can get a feel for how much growth Facebook can expect from the region.

Now let’s look at this equation from the other side of the fence, from the perspective of the companies that would pay Facebook to reach the users in the Middle East and North Africa.  A recent survey on the social media marketing initiatives of companies in the MENA region concluded that 81% of them will increase investments in social media activity. The same research says that 36% of MENA companies are only at the experimental stages of interacting with social media.

Again, another growth goldmine.

And Facebook certainly needs such a goldmine to prop up what the world is beginning to think is a sagging revenue stream. The company’s earnings for the first quarter of 2012 dropped 12% to USD 205 million.

Will the Middle East’s rich oil-exporting nations and their companies become the saviors of yet another global giant?

It’s going to be an interesting journey to watch.

Posted in: Corporate