IT giant LinkDotNet has bought nine Internet companies and promises to make "Internet history." Unfortunately, it's a little foggy on the details. Amira Howeidy reports LinkDotNet, which calls itself Egypt's largest Internet Service Provider (ISP), announced this week a surprise and, at first glance, impressive acquisition of nine "leading Egyptian Internet companies." The mega-purchase comes via a share-swap deal that will lift Link's market capitalisation to LE365 million. LinkDotNet is now the proud owner of ArabFinance.com, CareerMidEast.com, E-Dar.com, El3ab.com, Masrawy.com, Mazika.com, Nilemart.com and Otlob.com. The ninth acquisition is Internet Egypt, an ISP which Link Chief Executive Officer and President Khaled Bichara introduced as one of Egypt's "largest." Link's biggest shareholder is Orascom Telecom, followed by the National Telecommunications Corporation (NTC). Slotting beneath them will be the previous owners of the nine newly-bought companies and other private investors. A high turnout of journalists and IT luminaries (mostly the previous owners of the newly- acquired nine) were present for the launch ceremony at the Conrad Hotel on Tuesday. The press conference was full of theatrical moments: during his celebratory speech, Bichara paused at one point while the screen behind him resolved into a magnified picture of the "makers" of the nine companies. They were holding their arms aloft, indicating victory. The overall mood of optimism couldn't be missed, even though this nine-way merger comes at a critical time for Egypt's economic fortunes. And for the fortunes of Egypt's IT industry. Since the launch of the free Internet model last January (which lets users log on without paying a monthly subscription fee), the IT scene has remained as moribund as the economy generally. It has clearly been waiting for some sort of breakthrough. So is this grand event the "breakthrough" the industry needs? It comes two years after the Ministry of Communication and Information Technology was formed amid promises that Egypt would become the region's IT hub. It was an exciting time, with dozens of news and entertainment portals taking Internet surfers by storm. But eventually reality struck, as fiasco followed fiasco, and most of the grand ambition was shown for the hubris it was. The hype cooled, and talk of an IT hub, or any hub for that matter, ceased. Enter Link. It has acquired a portfolio of Internet businesses which, though they may not be commercially successful, have, in one way or another, established themselves on Egypt's IT landscape. Otlob.com was the country's first on-line ordering service. CareerMidEast.com, formerly CareerEgypt.com, was Egypt's first on-line recruitment site. And although it was not the first local "portal," Masrawy has earned a reputation for attracting lots of Egyptians on-line. But why should this merger make "Arab Internet history," as Link's press release proudly asserts? Naguib Sawiris, chairman of Orascom Telecom, offered this: "In the post-dot.com era, strength, predictability and business efficiency are all essential for longer-term Internet growth strategies. The LinkDotNet acquisition consolidates nine leading Egyptian Internet companies into one solid operating structure and is a healthy step forward for the region's Internet industry." Not only does this step strengthen Link's "leadership" position in the Arab world, he added, "but also Egypt's overall position as an important participant in the Internet economy." Indeed it seems logical that a large, strong IT company is more likely to survive economic turmoil than 10 Internet companies standing alone. But the problem is that Link simply hasn't made public the data needed to show exactly how strong it now is, or how large, in terms of users, it has now become. Analysts and pundits are deprived of the basic statistics that would allow them to see whether Link's bottom line is as grandiose as its rhetoric. Or to put it another way, "Where's the meat?" LinkDotNet claims to be the largest ISP in the country. It probably is. But how large is large? It refuses to reveal the number of Internet users that use it to log on. Masrawy makes similar claims for its portal. But again, it refuses to say how many users it really has. Many Cairenes know that Otlob exists; some may even use it to order food and pharmaceuticals on-line. But Otlob still uses the laborious, and costly, system of having a person check Internet orders as they come in, then physically telephone the restaurant to order. Otlob is far from doing true on-line transactions, and it is keeping mum about how (or whether) it actually makes money. For all this, "regional expansion" was a buzz-phrase at the press conference, often repeated by Bichara, Sawiris and representatives of the NTC. But again, no elaboration was offered. Instead, reporters seemed more interested in asking about free Internet and MCIT's promises of an affordable, locally-manufactured PC. But some are growing suspicious. The reason for the general omerta is simple, critics say. These businesses were not making money and Link's acquisition has saved them. The founder of one of the nine companies, demanding anonymity, told Al- Ahram Weekly that were it not for the acquisition, his company would have been "doomed." He added, however, that "This is exciting news for all of us. We will be working together and we must grow together, because we complete one another." Some, though, are a little more cynical. And until Link deigns to give the world some hard facts and figures about its latest move, the jury is likely to remain well and truly out.
