DUBAI, June 26 (Xinhua) -- The market for social media and smart-phone applications in the Middle East and North Africa (MENA) witnesses an unprecedented boom amid fierce competition for margins, said experts at the 3-day Arabnet Digital Summit which ended in its fourth edition here Wednesday.
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DIGITAL MEDIA BOOMING</b>
Online advertising in MENA is growing at an unprecedented rate of 37 percent per year to hit 2.8 billion by 2016, said Omar Christidis, the founder and CEO of Arabnet, the largest network platform for the digital media industry in MENA.
This led Baris Aksoy, the regional director of Intel Capital the investment arm of the U.S. chip producer, to say that the MENA with its over 300 million people was the world's top growth region in relation to digital media and mobile applications.
"With over 60 percent of the region's population being under 30, social and mobile media is booming," said Aksoy.
The United Arab Emirates (UAE) with its 8.8 million inhabitants, has one of the highest mobile phone penetration rates in the world. However, there are two challenges which are "lack of digital advertising and monetization," said Aksoy.
Yousef Tuqan agreed. The CEO of interactive media company Flip Media said that the fast growth is also based on "the low basis effects." "Nowadays only 4 percent of advertising spend is done through digital channels," he said, adding that the marketing industry in the region was still in its early stage.
<b>U.S. INVESTORS RUSH TO MENA</b>
But this potential draws investors from around the world to the region.
Ettore Leale, managing partner at San Francisco-based investment firm Xplorer Capital, said the rush of U.S. heavyweights in cyberspace started in Aug. 2009 when e-mail and search engine provider Yahoo! bought its Dubai-based Arabic rival Maktoob (Arabic for letter).
"Yahoo's move raised awareness in the Silicon Valley about Arab digital growth prospects," said Leale. "Since then Facebook, LinkedIn and Google have set up offices in the Dubai Internet City free zone, the region's epicenter of digital media."
Moreover, Intel Capital's Aksoy said the firm has already invested in 2012 in Jordanian companies Jeeran.com, a web community platform, and ShooFeeTV through its Turkey-based Middle East fund.
However, not all MENA countries move at the same speed through the digital age.
According to Rashid AlBalla, the chief executive of internet holding group N2V.com in Riyadh, Saudi Arabia, Jordan and the UAE are the most advanced markets in relation to digital consumer developments and innovation. "(Such as) My home country Saudi Arabia, albeit with over 30 million people, the biggest Gulf state, has a broad potential base but it is a very conservative, closed market which put additional challenge to the dotcom-industry in MENA."
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