On the last day of this very productive year for web business in Turkey, a big investment & partnership news was just announced. Serdar Kuzuloğlu, founder of MYK Medya, posted an article on his personal blog about the incident. Couple of weeks after Adhood (a Turkticaret.net company) started to sell ADs for MYK Medya, Turkticaret.net, which has many different services like domain trade, hosting, ecommerce solutions and partnerships with Turkcell, Alibaba etc., now joins the team as an investor.

MYK has three online products, which are televidyon; a web TV with 9 online channels, all shot, cut and published by the MYK crew, yahoyt, a tech-focused news portal and kaybolduk.biz, a getlost-discover-share platform in cooperation with Nokia. Kuzuloğlu says that they invested more than EUR250K just into their studios last year. A little older than a year, MYK is now 11 people and wasn’t funded before, meaning they were profitable from the start. They simply bootstrapped with consultancy jobs and the main revenue at the moment comes actually from adverstisements.

The partnership, where the invested amount is kept secret, means not only extra cash for MYK. Turkticaret.net is one of the oldest players the Turkish scene has to offer and they own domains like mobil.tv or web.tv, MYK will also be involved in projects that will use these domains. MYK owns a single studio at the moment, plans to have more in 2009 and to raise the channel amount to 25, according to the announcement written by Kuzuloğlu.

Serdar Kuzuloğlu is one of the key characters in the Turkish web scene, well known and respected by the new generation of entrepreneurs. After a long carrier as a technology editor at Doğan Medya, he became the Director of New Generation Services, managing the whole web, mobile and IPTV vision of Doğan Holding, which owns pretty much the half of Turkish old school media. After 11 months at that position, he left Doğan Holding and focused on MYK.

As the Turkish market matures, we are starting to see more of these specialized web applications, which focus on a certain part of life. Lately, health has become one of these hot topics, as two big announcements were made within a month and a third one is on its way.

Angels join forces

That Çağlar Erol and Kerim Baran joined forces and partnered up with Dr. med. Erden Asena of doktorsitesi.com was the first of these important announcements. To be clear, Çağlar Erol is the founder of çember.net (sold to Xing for EUR4,5m) and Kerim Baran is the founder of Yonja (sold 50% of it for USD12,5m to Mynet backed by Tiger Global). Doktorsitesi.com was founded in Izmir few years ago and a year ago, they moved to Istanbul and opened their office here. Doktorsitesi charges doctors for their profiles, lets private hospitals and clinics sponsor topics relevant to their specialty and shows some text and display ads.

Dr. Asena prepared an image of the frontend, which was actually not there, and showed that to 15 doctors and asked them if they would pay for a profile on a ‘portal’ like that. It was the end of 2004 and 10 of those doctors said yes. They became the first members of doktorsitesi.com who would paid right ahead and the site was actually build with that money. Now doktorsitesi has 3000 doctors and more than 140k members, who ask doctors questions. Erden Asena plans with 400k members with the end of 2008.

The application itself has a way to go, but it has a strong user base. Now with the operational experience of Çağlar Erol and Kerim Baran, it has a good chance to stand against the strong newcomers.

Turkcell is coming to the web

Turkcell is the biggest GSM operator in Turkey with more than 30 million subscribers. They are also a very big technology producer with a huge tech center on the Anatolian side of Istanbul. During the Cebit Eurasia last week, Turkcell announced couple of new mobile health tools. Turkcell VP Cenk Serdar tells Timur Sırt of Teknosohbet that these tools are going to be used for remote measurement, diagnosis and treatment. This would be an essential step, because Turkey has 41% of all the MDs in three major cities. Many people from small villages have to drive kilometers to the next doctors office.

Turkcell met many active players from the health sector to find out what other needs they have and the result was a central platform to share and find knowledge on a trustworthy base. This led to the founding of saglik365.com, which is now in a public beta. Saglik365.com has classic features of a social health platform but there is something that Cenk Serdar is saying during the interview, which I think will be really important in the long run. He implies some kind of an API which will allow other health companies (labs, hospitals, software developers etc.) to build their own applications and publish them on saglik365.com. Turkcell has the power to bring the big players of health to come to saglik365.com. If you look at the about page of saglik365, you will see the logos of very important Turkish and international companies, including Intel and Siemens.

The vision of an API shows that Turkcell as a GSM operator has found the right people to work with them on web. We’ll see if they will be successful on their first social applicaion in web, or not.

And the bogeyman

Doğan Online -part of Doğan Holding; the biggest media holding in Turkey- is running the Turkish version of realage.com; realage.com.tr. Real Age is a concept of Mehmet Öz and Michael Roizen, which are famous mostly because of their book “YOU: The Owner’s Manual”. There is a huge form to fill out with deepest behavorial, medical, psychological information about yourself, which in the end will be used to determine your real age, hence the name. Some insiders say that more than 2,5 million people –only in Turkey- filled out the form. And of course, the time is coming near, where Doğan will use this mountain of valuable information about individuals to make money.

Doğan Online is now working on a social application based around realage.com.tr. The details are not clear, but it will most probably have a similar positioning to others; Q&As, groups, doctors’ profiles etc. Even though Doğan has messed up a lot in the past years, they still have a strong presence and of course a huge media power to back up this kind of service. 2,5 people potential members are also something that should be taken in consideration. Doğan is often blamed by web professionals in Turkey for their habit to build bad products and lower the bar by doing so. But Turkish users don’t really sense the difference between good and bad, if that’s the case. That’s why, I still believe that Doğan will be -at least- annoying for others, who count on massive traffic and popularity among the people.

Why this rush is actually not sudden

Health is something where nobody can afford to cut on expenses and the changes of the health/insurance system in Turkey made it a very open and big market. Within years, very big health corporations emerged and many were bought by foreing companies. A research made by my colleague Mehmet Ayan shows that more than USD10 billion were invested into private health, which makes it a pretty clear goal for buyers and sellers. Until 2023, it is planned to double the number of MDs. At the end 2008, 77 new state and 100 new private hospitals will be build, which means a growth of apprx. 15%.

These numbers make it very easy to understand, why all of a sudden, even Turkcell is trying to be a part of the ‘new’ communication tool, which in the future will play a very important role in patients’ decisions about which doctor or hospital they’ll go to. I don’t think that Turkcell or Doğan plan of an exit, but doktorsitesi.com will surely be open for buyers in a couple of years. However, this probability will not be there before two or three years have passed and doktorsitesi has become a million dollar business.

Wednesday, I was checking Friendfeed to see if anything interesting happened and I saw that elmaaltshift was banned. Fırat Yıldız, the founder of this well known Turkish blog was telling that he was not warned or what so ever. I immediately clicked on the link and saw the famous big red warning “This site is banned due to court decision” For a second, I was also mad but then I thought of a small detail –that I was in Germany and the bans could only effect Turkish Internet users- that made me realize the true nature of this incidence. Fırat was protesting the Turkish government, which has banned a couple of hundred websites last year.

On Wednesday (13.08.2008) the protest got supported by Fırat’s friends, which are more or less the most active crowd in the Turkish blogosphere. Selim Yörük of anafikir.com prepared a simple code for all bloggers and websites to use, which would put the same message on their main pages. In four days, 167 blogs and websites including major blogs and portals such as sinema.com, futuristika.org, burak.com and cisday.org. You can view the full list of the protestors in anafikir.com/sansur. Selim says “Poeple just get used to lose their freedom. This experiment is trying to shock the people by trying to show them how it would be if sites get banned so fast. I think, it increased the awareness of people very well.”

Youtube, Netlog, Slide, Tagged and Alibaba are some of the major sites that were banned over the course of two years. Youtube for example is still banned and cannot be reached from Turkey. There are a zillion ways to get over the ban, but of course this is no excuse. There are also some gags, that are actually quite funny; IMDB.com was also going to be banned because some movie producers thought that IMDB is a source to download DIVX movies. Later on, it came out that they were trying to ban IMBD.com because of a typo. And as far as I know, IMDB was never banned…

Alibaba.com? Why ban an e-commerce platform? Does it damage the Turkish market? Or what about Slide.com? Why would one ever want to ban a presentation-sharing portal? There are many speculations about the reason of these bans. More than often, a court in a quite small town in Turkey will decide if the accused sites should be banned or not.

Is there a solution?

Başak Purut, a Turkish lawyer who specialized in these kind of processes says that “this kind of protests will lead us nowhere, because Turkish politicians absolutely don’t care which sites are banned and why.” He also thinks that the law will get stricter in the future and the only way to solve this issue is to get the attention of the EU, which would maybe talk Turkish politicians into changing the law that regulates the bans.

This is an option, that would solve the problem, but there is another solution for the companies that want to keep their products online in Turkey: Open an office in Turkey. Every company that wishes to get the huge amount of traffic from countries like Turkey, has to deal with the fact that it IS a different country with its own rules. Whether these rules are correct or not, is another discussion topic and it should be clear by now what I think of them, but it is also clear that these rules are not going to change for a while. Youtube was banned 3 or 4 times, and the last one lasted longer then three months (still on by the way). There is something wrong with that… It is a question of importance. How important is it to Youtube, a company of Google that it is down in Turkey for three months? Now there are rumous of a youtube.com.tr, a local version of youtube which will exclude illegal content. Global players have to consider these kind of ‘details’ or they lose markets to smaller local players faster than they can anticipate.

UPDATE: More blogs are starting to talk about this. Check this article on Techcrunch.

Some markets of the new economy come first when we look at expansion possibilities of web giants. Europe, of course, because of the high penetration rate and China, with the highest rate of usage growth and more than 1 billion potential customers. It’s clearly a good idea to take a chance in those markets. But what about possible others?

Let’s take a look at Turkey. With an estimated Internet penetration of 37%, Turkey has a total Internet user amount of 26 million people. You can find more to it in this study of Sina Afra from Ebay. I wish to give an introduction to this newly blooming market, which, I think, should be on the list of every company who has the goal to be successful on a global scale.

Where is the buzz?

It is a clear fact that the Turkish society is into socializing. According to Wave 3, social networks are by far the most used Web 2.0 tool in Turkey. 67% of the Internet users have a profile on social networks, which also makes it clear why Facebook has 3.6 million users from Turkey. Myspace, Hi5, Perfspot and the local Yonja are also some of the bigger social networks that are very popular in Turkey. Next to social networks, blogging and news are the other most important areas in the Turkish Internet market. News are of course ruled by local players, which are mostly web sites of existing news providers like NTV, Hürriyet, Milliyet and Habertürk, but Google seems to be aware of the gap and launches the Turkish Google News.

E-commerce is also an important area, where the Turkish market is far from satiety. Because of some cultural characteristics, Turkish people still don’t think it is safe or clever to shop online. Surely this doesn’t mean that there is no one there. Ebay for instance made a move and bought 20% of gittigidiyor, which is the leader of the auction market.

Turkish startup scene; a newborn baby

When we look at the innovative Web 2.0 applications and services that have been built so far, we see a small amount of startups behind them. These are mostly people with international relations who have seen the future, and want to create it in their own country. 2008, however, has been a very productive year for Turkey, with many milestones. In my opinion, the startup scene was born just this year. What we’ve seen in the Valley, in Berlin, or in London, is now also happening in Istanbul. Small teams do roadshows, weekly or monthly events take place and the first VC funds were founded (Leventure, LabX, Ilab, Golden Horn Ventures etc.). Also, the first investments were raised in a way it happens in the world. For me, events, fresh startups and foreign players are important benchmarks to evaluate a country’s potential. That’s why I’ll sum these up.

Events

Etohum is ‘the’ event, if you like to meet some great people and hear stories of successful Turkish startups. Etohum means E-Seed and aims to gather a group of young entrepreneurs to coach them through the process of starting their own company. All kind of people from different segments of the business are part of the team that is behind the organisation. Also people from abroad are invited to the events and the website is in four languages, inviting everyone to Istanbul to attend the meetings. Maslunch, Geeklunch and Likemind meetups both in Ankara and Istanbul are also followed by many. There is a Startup Weekend coming at the end of August, which will be a first for Turkey and because of the ‘concrete’ format of the event, the press shows great interest. There are some rumours of a Barcamp coming, but there has been no announcement yet.

Fresh meat

I will just give names of some new Turkish startups, which are either lately the top topics among the community or my personal favourites. Later on, I will try to write more about Turkish startups.

• Knowband: This e-learning social network is about people, courses and tools to bind these two. Pretty cool.
• Takasmerkezi: Online shopping without money. Sell your own stuff, buy other things with the money you’ve earned.
• Mekanist: Sharing, voting, rating places and events online.
• Befunky: With tools like cartoonizer, uvatar and video
  cartoonizer, these guys are trying to “change the face of internet.” Also pretty cool.
• Wridea: A service to collect, organize and manage your ideas, including some great tools for brainstorming.
• Exoin: A “publishing platform”, where you can also post geo-content.

The stranger(s) in town

Google, of course, was one of the first companies, to open an office in Turkey, which -until now- actually served more as a sales office for Adwords. Yahoo and Mypsace are other giants that finally thought on building a real operation in Turkey. The Turkish landing page of Yahoo was launched couple of days ago and Myspace is (with a little help from her bigger brother Rupert Murdoch) doing also well. When we look at the European startups, there are Kindo, Xing (bought Turkish business network for EUR4.5m), Sevenload and mixxt who are already in the market with local teams. Sevenload is making plans of a dev-team in Istanbul and Xing is already hiring more people. It is an open market, and despite the fact that it is getting more and more crowded everyday, there is still a chance for everyone. However, as the market grows bigger, expanding to Turkey will be too expensive for startups.

Conclusion

For me, it is obvious that Turkey will be one of the most important markets in Europe. Turkish politics and economy are on a more solid ground now and the chances that an emerging market delivers are clearly there. Turkish startups will learn how to do business on a long term based plans and bigger investment deals are going to get closed more often. This will follow to better services built by local teams, which, I think, will focus on social networks and social shopping.

About the author:

Şekip Can Gökalp, born in 1984 in Istanbul, has been producing social networks since 2003 and focused on internationalisation and localisation of web services. He is the Country Manager Turkey of mixxt and consults European startups in their expansion strategies into and out of Turkey. You can follow him on Twitter.