Web 2.0 sites attract investments
For a long time new media specialists have been predicting that local Web 2.0 websites were set to take off. This is slowly starting to happen, and large corporations are taking note.
The increase in broadband connections in South Africa and a growing Internet savvy population means that people are looking for more to do online than checking email, doing Internet banking and reading the news.
The emergence of international new media websites like MySpace, Facebook and YouTube attracted large investments from companies such as News Corporation, Microsoft, and Google.
The popularity of Facebook and Youtube in South Africa further gave a strong indication that local consumers were hungry for online interaction, and local entrepreneurs saw this as an opportunity to launch more localized new media brands.
Many new social media websites were launched in South Africa over the last few years, including social networking sites Blueworld and MyDigitallife, blogging aggregators Amatomu and Afrigator and video hosting websites Zoopy and MyVideo.
These websites are still small when compared with more traditional media websites like News24 and IOL, but their growth and future potential attracted investments from the likes of Naspers and Vodacom.
Blueworld, which is currently attracting 73 426 unique monthly visitors (audited Google Analytics), seems to be paying off for Naspers’ 24.com which invested in the business recently. Another Naspers subsidiary, MIH, bought a 75% stake in Afrigator which may be a good move to establish a more prominent foothold in Africa.
Vodacom, who made it clear that they were planning to become a media player in addition to their telecoms operations, has invested in local video sharing website Zoopy. The online video hosting space is currently dominated by Google owned YouTube, but through more local content and potentially being hosted locally, Zoopy may be able to capture a part of this lucrative market.
Convergence Partners Investments’ 25.55% stake in SkillPod Media (SkillPod), a pioneering South African online casual gaming company, is the latest investment in the online space in South Africa.
Andile Ngcaba, Convergence Partners’ chairman, said: “This investment enhances our exposure to the digital media market but also demonstrates the synergies which are materialising across our portfolio of investments. Online casual gaming is a sector that has experienced tremendous growth in the recent past and we believe that there are exciting convergence opportunities to be unlocked between the online and mobile content space in which we are already invested.”
It is clear that larger companies are starting to see value in the Internet environment in South Africa, and it is likely that we may see a few more investments of its kind in the online space.
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