Turkish Internet Sector Overview May 2008 Sina Afra eBay Germany, Director Gittigidiyor (eBay Turkey), Member of Board Turkey is catching up to the Top 10 Internet countries worldwide Internet Users by Country in 2007 (m) United States China Japan India Germany Brazil United Kingdom South Korea France Italy Turkey Russia Canada Mexico Spain Indonesia Australia Taiw an Poland Netherlands Malaysia Argentina 208 137 88 60 49 43 38 34 31 29 26 25 24 22 19 16 15 14 11 11 10 10 Australia Canada South Korea United States Japan Netherlands United Kingdom Taiw an Germany Italy France Spain Malaysia Turkey Poland Argentina Brazil Mexico Russia China Indonesia India Internet Penetration Rate by Country in 2007 (%) 75% 71% 70% 69% 69% 65% 62% 60% 59% 50% 49% 46% 40% 37% 29% 25% 22% 20% 18% 10% 7% 5% Turkey is worldwide No. 11 in Internet Users Turkey’s penetration is promising for future growth (European Medium 59%) Sources: Population figures 2007: CIA World Factbook Internet User Statistics: World Internet Stats; eBay Only countries with more than 10 m Internet Users were covered eBay 2008 Sina Afra 2 Key metric of broadband penetration in Turkey is aligning with leading countries Broadband Subscriptions by Country in 2007 (m) US Japan Germany South Korea UK France Italy Canada Turkey Spain Netherlands Mexico Australia Poland Sw eden Belgium Sw itzerland Denmark Portugal Austria Finland Norw ay 27,2 17,5 14,4 14,4 14,3 9,3 8,1 7,5 7,5 5,5 4,8 4,7 3,0 2,6 2,5 2,3 1,9 1,6 1,5 1,5 1,4 • Broadband in Turkey started late, 2003 with 55,000 subscriptions, but with tremendous growth N 66,2 66,2 • Avg. Connection speed is 1 Mbps • Monthly fees dropping Broadband is growing strongly • 2,000,000 IP DSLAM ports with connection speed up to 70 Mbps are going to be deployed the next years (Start was Jan 2008) * - This is especially important for IPTV eBay Sources: Organization for Economic Cooperation and Development (OECD), OECD Broadband Portal," November 6, 2007 Turkish Telecom 12/ 2007 *Turkish Telecom, 09/2007 2008 Sina Afra 3 eCommerce in Turkey is growing continuously Turkish eCommerce Total Volume in M USD 10.000 9.000 8.000 7.000 6.000 5.000 40% 4.000 3.000 2.000 1.000 0 2006a 2007a Total Market in M USD 2008e YoY in % 2009e 1.800 3.265 30% 20% 10% 0% 5.569 50% 71% 61% 81% 90% 8.955 80% 70% 60% Notes: Including New Goods, Used Goods, Motors, Travel, Entertainment, Real Estate, Personals Sources: BKM ; Internet Card Centre Reports, eBay estimates eBay 2008 Sina Afra 4 Also other metrics indicate that Turkey is catching up on the Internet Sector… Top 10 Countries Worldwide Ranked by eGovernment 2007 (100-point scale) 0 South Korea 74,9 Singapore Taiwan US UK Canada Portugal Australia Turkey Germany 44,3 44,1 43,8 43,5 43,5 42,9 54 51,1 49,4 20 40 60 80 100 Note: based on availability of publications, databases and number of online services (ie the entire transaction can be completed online), features important for information availability, citizen access, portal access and service delivery; excludes Web sites for sub-national units, obscure boards and commissions, local government, regional units and municipal offices Source: Brown University, Taubman Center for Public Policy, "Global E-Government, 2007," August 2007, eBay eBay 2008 Sina Afra 5 … all kind of metrics, indeed Top 10 Countries Hosting Phishing Web Sites Worldwide, 2007 (% of total) Top 10 Countries Worldwide, Ranked by active Facebook Users ) 0% US China Russia South Korea Germany France Turkey UK Canada Italy 5% 10% 15% 20% 25% 30% 35% 32,41% 13,00% 7,41% 6,78% 4,15% 3,51% 3,38% 3,30% 3,29% 1,97% Notes: a) based on Websense Security Labs data b) Phishing is an attempt to criminally and fraudulently acquire sensitive information, such as usernames, passwords and credit card details, by masquerading as a trustworthy entity in an electronic communication Source: Anti-Phising Working Group (APWG), "Phishing Activity Trends: Report for the Month of May, 2007," July 2007 eBay 2008 Sina Afra 6 The internet population is young – 77% of the internet population is between 16 and 34 years old Internet Users in Turkey by ages 45,03% 32,09% Who are they? 66% of Internet users is male, 34% is female Average age is 26 both for male and female users 53% is in A/B/C1 SES 22% is graduated from university 68% is single 45% is employed, 37% is studying 39% speaks English 52% has PC in the house 91% has cellphone 84% is watching TV daily (avg. time spend is 3 hours) 63% is listening to the radio daily (avg. time spend is 2 hours) Average Internet connection is 2.5 hours / day Average Internet connections per month is 22 14,12% 6,80% 1,55% 16-24 25-34 35-44 45-54 55-64 0,39% 65-74 Source: Nokta Internet Technologies 2008, GfK Turkey Report 2006 eBay 2008 Sina Afra 7 Online advertising will become the third largest advertising area in 2010 – especially when penetration of online ad technologies increase Turkish Advertising Market by medium (in %) 2.3 B USD 100% 1% 4% 4% 2% 6% Online Growth Outlook in M USD 2005 - 2010 Online share 300 3.6 B USD 1% 3% 4% 5% 7% < 1% 2% 2% 3% 6% 7% 249 250 80% 32% 60% 31% 200 178 150 40% 100 89 50 51% 20% 49% 50 23 33 0% 2007 TV Newspapers Online Magazines Outdoor 2010 Radio Other 0 2005 2006 2007 2008 2009 2010 Note: Net Advertising Revenues Sources: Türkiye Reklam Arastirma Merkezi (TRAM); eBay estimates eBay 2008 Sina Afra 8 The Internet Landscape in Turkey Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 eBay Site google.com.tr facebook.com live.com google.com youtube.com Milliyet.com.tr hurriyet.com.tr mynet.com yahoo.com rapidshare.com blogger.com msn.com ekolay.net sourtimes.org gittigidiyor.com Sahibinden.com wikipedia.org internethaber.com haberturk.com imageshack.us sabah.com.tr haber7.com netlog.com blogcu.com hepsiburada.com Type Search Social Network Portal Search Video News News Portal Search File Sharing Blog Search Portal Information eCommerce eCommerce Information News News File Sharing News News Social Network Blog eCommerce Ownership Google Facebook Microsoft Google Google Dogan Media Dogan Media Mynet Yahoo Rapidshare Google Microsoft Dogan Media Independent eBay & Independent Independent Wikipedia Independent Ciner Yayin Imageschack Merkez Kanal 7 Netlog Nokta Internet Dogan Media 2008 Sina Afra Top 25 Online Companies according Alexa.com: • News and Information as well as Search are the types of internet activities with the strongest traffic • Google and Dogan control each 4 out of the top 25 sites 9 Outlook: Turkey’s Online Sector in 2010 Turkish Internet Sector in 2010: • 32-36 M Internet Users with a 10 B USD eCommerce Market and 250 M USD Online Advertising Market • Turkey will be one of the top 10 countries in Internet Users and catch up in eCommerce and Advertising The strategic importance of gateways will increase • • • There are certain activities that drive a user’s decision to go to one site over another We call these activities gateways: email, search, shopping, news, weather, maps, etc. The importance of gateways is increasing The game could be over for email and search but beyond these activities, no site dominates a gateway….and the gateways on mobile devices are different and completely up for grabs Major Developments: eCommerce will continue to develop strongly • • • The Turkish internet users will arrive in the next 2-3 in the eCommerce and the buyer side will continue to evolve. The seller side will introduce new ways of shopping (e.g. Exclusive Shopping Sites; Private Sales; Activity based Shopping etc.) and improved technologies (e.g. catalogue based Shopping Comparison) Mass customization as well as niche players will enter the long tail – this will lead to a strong entrepreneurship in the eCommerce segment Consolidation is inevitable will continue – 2006 was likely just the beginning: • • • We expect that some companies will successfully pursue a global multi-business strategy, but it will likely be done via partnerships, acquisitions, and/or investments as opposed to a pure organic build strategy Turkish Stand-alone companies and brands can survive as independents, but will likely still be pursued most aggressively by larger companies to penetrate consumers and advertisers The value of a business that cannot compete on engagement and monetization will become greater for an acquirer that has a strategic hole in its business mix than the value of the business on a stand-alone basis We expect the accelerated introduction of advanced advertising technologies and international partnerships in the advertising segment Foreign VC and Business Angel money will discover Turkey and create the financial framework of a strong entrepreneurship driven market eBay 2008 Sina Afra 10 These strategic themes will continue to define success in Turkey 1. Maximize engagement – owning differentiated and complementary gateways is required to drive reach, frequency and duration Expand the user base – consumers, publishers, advertisers, buyers and sellers Increase usage areas – applications (email, search, VoIP, IM, blogging, software), services (payments, stores, advertising), information (maps, weather, news), entertainment (sports, user-generated content, WebTV), and commerce Develop a multi-platform strategy – PC, mobile device, and the television 2. Optimize monetization – engagement is necessary but not sufficient Advertising – branded, pay for performance search (click, call, acquisition, lead generation), direct marketing e-Commerce – retail, marketplace, stores, shopping comparison Subscriptions – VoIP, email, fantasy sports, dating, careers, games Payments – transactions, communications, B2B, PC, mobile, etc. 3. Be part of the internalization – to capture two increasingly critical benefits Leverage learning across markets in order to capture growth Provide Incremental benefits to users (consumers, advertisers, sellers, etc.) due to a global footprint eBay 2008 Sina Afra 11 Contact Details Sina Afra eBay Germany, German Leadership Team safra@ebay.de +49 – 163 – 3229 402 eBay 2008 Sina Afra 12