ALLAFRICA.COM CARVES ITSELF DOMINANT POSITION AS AFRICAN NEWS PROVIDER
7 June 2002
In a landscape littered with dot failures, AllAfrica.com is a success story. In little over a year it has created an unrivalled, pan-continental news source with over 7 million (audited) page views per month. Launched (intentionally) with very modest start-up capital, it is for lack of marketing a well-kept secret for too many of its potential readers. It will "go cash positive" by the end of 2004 and is growing rapidly. Its largely African diaspora users are beginning to make their impact felt "back home". Russell Southwood spoke to its Executive Editor/Producer, Akwe Amosu and its Chief Strategy Officer Tami Hultman in Washington DC where it is based.
AllAfrica.com came out a not-for-profit called Africa News Online launched in 1993. By 1998, there was no possibility of sustaining itself as a not-for-profit and its creators started to put together investment proposals during the heady dotcom boom. Excited by the idea, one group of investors were offering them US$14 million but they turned it down. Instead they went with a package offered by angel investors (the majority African) of US$2 million and claim to have exceeded their business plan expectations through cost-control and unexpected sources of income.
The basis for the site is the skilful culling of stories from African newspapers across the continent. Most of this work is now done electronically and AllAfrica.com has entered into sales agreements with African publishers who take a percentage of the on-sales income that AllAfrica.com makes from selling their material to publishers in the North.
Growth in site use has been so strong that server capacity has had to be increased and this has in the short term "retarded revenue growth". Page views are growing 9% per month and in May there were 9.6 million (unaudited) page views. So who are its primary users?
According to Akwe Amosu they are:"Business people, government officers, academics, students and NGOs". 70% are from the USA, 20-25% from Europe and Asia and 5-10% from Africa. Akwe believes that restrictions in access account for the relatively small African usage but that "we want to see an expansion of the user base in Africa." The biggest group is the African diaspora.They use AllAfrica.com as a way of genuinely keeping in touch. They read what their compatriots are reading at exactly the same time as them. This will bring about a major change in the relationship between the diaspora and people at home."
According to Akwe, there is steady development of communities of professional interest. For example through groups like the Nigeria-based Journalists Against AIDS, Nigerian doctors in the USA are communicating directly with their counterparts back home. Also the debates they run over continental issues like the Zimbabwe elections cast an interest light on broader gathering debates. According to Akwe:"Some people from the West were saying that the West was racist and that Mugabe was standing up for us. From back in Africa, there was a strong flow of messages saying ‘it’s alright for you. We don’t want this guy. We want a proper representative democracy. This is very different from what used to happen in the past. It’s having an effect on domestic politics and what we want to achieve as Africans." Interestingly the number of Africans using AllAfrica goes up significantly during these debates. As Tami Hultman told us:"We’ve only been in existence for a year and a quarter and have done no marketing. We’ve only just begun to tap the potential out there."
The basis of the business model has several income streams:
Technology solutions: 45%
Information sales: 36%
Advertising and transactions: 18%
Its technology solution offering is XML::Comma, the underlying database solution for its own site which is says is "flexible, scalable and stable in enterprise-level applications." Based on free and open-source software, it uses linux, Perl and databases like MySQL and PostgreSQL:"We’re technology agnostic and look for tools that are stable, powerful and efficient." Its first client is the powerful Democratic National Committee (www.democrats.org). They are using it for online fundraising using different lists to target different audiences.
In content sales terms, they claim to be the largest supplier of information about Africa. They sell mainly to wholesalers. So for example, The Nation, one of Africa’s best media producers can sell to global information wholesalers. By themselves, they’d probably be small to achieve this. According to Hultman:"We package the information in different ways for different clients". The list includes: Lexis/Nexis, Factua, Comtex, and Bloomberg."We get a royalty that varies from contract to contract but tends to be around 20%. Half of these revenues go to back to the African publications.
The main advertising markets are banks, wire transfer services, phone companies offering long-distance services, conference organisers and multilateral organisations. It will be targeting airlines as the monthly page views increases. Ads are pulled up according to the search categories users enter. E-transactions are currently in their infancy, consisting mainly of selling a business directory but again will develop strongly in the coming year.
Future plans? It wants to launch a newsletter targeted at business to Africa on a sub fees or password-protected basis, And it will launch 3 non-profit channels covering health and medicine, sustainable development and the environment and conflict resolution. Fundraising for the latter will go through the AllAfrica Foundation.
According to Akwe Amosu:"We are company with a strong social vision, making a pan-African newspaper every day. Civil society in Africa is reaching a critical mass and they will press for and advocate a different type of life."