Turkish Internet Sector

Turkish Internet Sector Overview

May 2008

Sina AfraeBay Germany, DirectorGittigidiyor (eBay Turkey), Member of Board

eBay 2008 Sina Afra 2

Turkey is catching up to the Top 10 Internet countries worldwide

208

137

88

60

49

43

38

34

31

29

25

24

22

19

16

15

14

11

11

10

10

26

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

75%

71%

70%

69%

69%

65%

62%

60%

59%

50%

49%

46%

40%

29%

25%

22%

20%

18%

10%

7%

5%

37%

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 Users by

Country in 2007 (m)

Internet Penetration Rate by

Country in 2007 (%)

Sources: Population figures 2007: CIA World Factbook

Internet User Statistics: World Internet Stats; eBayOnly countries with more than 10 m Internet Users were covered

Turkey is worldwide No. 11 in Internet Users

Turkey’s penetration is promising for future growth

(European Medium 59%)


Key metric of broadband penetration in Turkey is aligning with leading countries

Sources: Organization for Economic Cooperation and Development (OECD),

OECD Broadband Portal," November 6, 2007Turkish Telecom 12/ 2007*Turkish Telecom, 09/2007

Broadband is growing strongly

Broadband Subscriptions

by Country in 2007 (m)

• Broadband in Turkey started late, 2003 with 55,000 subscriptions, but with tremendous growth

• Avg. Connection speed is 1 Mbps

• Monthly fees dropping

• 2,000,000 IP DSLAM ports withconnection speed up to 70 Mbps are going to be deployed the next years (Start was Jan 2008) * - This is especiallyimportant for IPTV

66,2

27,2

17,5

14,4

14,4

14,3

9,3

8,1

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

7,5

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

N 66,2


eCommerce in Turkey is growing continuously

Turkish eCommerce Total Volume in M USD

Notes:

Including New Goods, Used Goods, Motors, Travel, Entertainment, Real Estate, PersonalsSources:BKM ; Internet Card Centre Reports, eBay estimates

1.800

3.265

5.569

8.95581%

61%

71%

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

2006a 2007a 2008e 2009e

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Total Market in M USD YoY in %


Also other metrics indicate that Turkey is catching up on the Internet Sector…

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; excludesWeb 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

54

51,1

49,4

44,3

44,1

43,8

43,5

43,5

42,9

74,9

0 20 40 60 80 100

South Korea

Singapore

Taiwan

US

UK

Canada

Portugal

Australia

Turkey

Germany

Top 10 Countries Worldwide Ranked by eGovernment 2007 (100-point scale)


… all kind of metrics, indeed

32,41%

13,00%

7,41%

6,78%

4,15%

3,51%

3,38%

3,30%

3,29%

1,97%

0% 5% 10% 15% 20% 25% 30% 35%

US

China

Russia

South Korea

Germany

France

Turkey

UK

Canada

Italy

Top 10 Countries Hosting Phishing Web SitesWorldwide, 2007 (% of total)

Source: Anti-Phising Working Group (APWG), "Phishing Activity Trends: Report for the Month of May, 2007," July 2007

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

Top 10 Countries Worldwide, Ranked by active Facebook Users )


The internet population is young – 77% of the internet population is between 16 and 34 years old

45,03%

32,09%

14,12%

6,80%

1,55% 0,39%

16-24 25-34 35-44 45-54 55-64 65-74

Internet Users in Turkeyby ages

Source: Nokta Internet Technologies 2008, GfK Turkey Report 2006

� 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

Who are they?


Online advertising will become the third largest advertising area in 2010 – especially when penetration of online ad technologies increase

51% 49%

32%31%

6% 5%

7%2%

4%4%

3%4%1%1%

0%

20%

40%

60%

80%

100%

2007 2010

TV Newspapers Online Magazines Outdoor Radio Other

2333

50

89

178

249

0

50

100

150

200

250

300

2005 2006 2007 2008 2009 2010

Turkish Advertising Marketby medium (in %)

Online Growth Outlook in M USD

2005 - 2010

Online

share 2% 3% 6% 7%< 1% 2%

Note: Net Advertising Revenues

Sources: Türkiye Reklam Arastirma Merkezi (TRAM); eBay estimates

2.3 B USD 3.6 B USD


The Internet Landscape in Turkey

Rank Site Type Ownership

1 google.com.tr Search Google

2 facebook.com Social Network Facebook

3 live.com Portal Microsoft

4 google.com Search Google

5 youtube.com Video Google

6 Milliyet.com.tr News Dogan Media

7 hurriyet.com.tr News Dogan Media

8 mynet.com Portal Mynet

9 yahoo.com Search Yahoo

10 rapidshare.com File Sharing Rapidshare

11 blogger.com Blog Google

12 msn.com Search Microsoft

13 ekolay.net Portal Dogan Media

14 sourtimes.org Information Independent

15 gittigidiyor.com eCommerce eBay & Independent

16 Sahibinden.com eCommerce Independent

17 wikipedia.org Information Wikipedia

18 internethaber.com News Independent

19 haberturk.com News Ciner Yayin

20 imageshack.us File Sharing Imageschack

21 sabah.com.tr News Merkez

22 haber7.com News Kanal 7

23 netlog.com Social Network Netlog

24 blogcu.com Blog Nokta Internet

25 hepsiburada.com eCommerce Dogan Media

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


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

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

Majo

r D

evelo

pm

en

ts:


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


Sina AfraeBay Germany, German Leadership Team

[email protected]

+49 – 163 – 3229 402

Contact Details

Technology

Turkish Internet Sector