• Financial Times, Tuesday, August 25, 2009 12:52 PM

Tuesday's news of Yahoo's decision to buy Maktoob, the Arab world's largest Web community, has portal watchers everywhere asking, "What does it all mean?"

First and foremost, the deal will provide a huge boost to online advertising in the region, company executives tell The Financial Times.

For Yahoo's direct rivals like Google and Microsoft, it means serious competition in a market ripe for a boom given that Web penetration across the Middle East is less than 25% compared to more than 70% in the Western World, according to InternetWorldStats.com.

For investors, it means security and piece-of-mind in an emerging market, according to ArabCrunch (not affiliated with the TechCrunch network.) "Now Venture Capitalist[s] and investors will see that there is an exit in funding they put into startups from the Arab world ... Which means there will be more VCs and funding activities happing in the Arab world, which means more Arab startups and more jobs!"

Likewise, entrepreneurs of all stripes could be emboldened by Yahoo's investment, reckons StartUpArabia.com. "Hopefully this deal, as well as Google and Microsoft's moves in the region, will open the door for more international players to start seriously considering entering the online market in the Arab world, but even more importantly will show local investors the potential that exists in investing in sound internet startup ideas."

Meanwhile, for online auctioneers a la eBay, prepaid card payment technology providers, and MMO game developers and hosts, the deal could mean little, as these Maktoob-owned products were not included in the Yahoo deal.

Read the whole story at Financial Times »