Written by Mircea Goia

Romania is a country of 21 million people and is the biggest from the Balkans (Eastern Europe). The total Internet penetration rate is about 23% (5 million) and it’s the lowest in European Union. However the growth rate is one of the biggest (517% since 2000). Out of the 3.5 million Internet connections, more than half are broadband (cable or DSL is 8.2%, the same as Greece). Broadband and DSL connectivity is localized to cities, while in smaller towns and villages dial-up is many times the only option.

Online advertising spending is doubling year after year (it will be about $8 million in 2007) and half of Romanian web surfers perceive online ads as a good thing. There are two big advertising agencies in the country – Boom and Arbomedia – which share the market along with other small players. Now Google Adsense and AdWords are available in the Romanian language too, so the competition is heating up. The growth rate of online advertising in Romania is the largest in Europe.

There is also a Webby Awards-like festival called Internetics; which rewards, yearly, the best sites in different categories. Microsoft has a customer support center in Romania and also many Romanian programmers are working at its general headquarters in Redmond. eBay opened an office here, but so far they are just observing the market. Google also has recruited some programmers and started making available Adsense and Adwords in Romanian. Paypal just started offering their services to Romanian markets too, however their offer is not yet complete.

Overview of Web 2.0 in Romania

Romania is trying to catch up with the Web 2.0 movement, but most of its sites/applications are localized versions of international sites/applications. The investments usually come from the private sector. The government is investing mainly in the educational system (buying computers for schools and colleges, setting up the infrastructure, etc).

A big investment came from the European Union (cooperation between EU and the Ministry of Education): the network called ROEdunet (Romanian NREN – National Research and Education Network). It’s a network that connects schools, colleges and universities around Romania.

Most of our web applications are built using open-source software (mainly LAMP), because of the low costs. Romania has a good pipe of programmers used to using these tools and many of them are working for foreign companies (outsourcing). Many investors see Romania as the “the India of Eastern Europe” in software programming. Also English is a language many young people have learned since kindergarten.

Romania Startups

Neogen – expanding in and outside Romania

Neogen is one of the biggest players on the Romanian web (and the biggest in the Web 2.0 market especially). The company has the following services:

  • personalized startpage (Neogen homepage – Netvibes or Pageflakes like)
  • search engine (the homepage also – Google like)
  • dating (Noi2)
  • social networking (Club Neogen – Myspace like)
  • social networking for primary school,high school and college students (Colegi – Facebook like)
  • jobsite (BestJobs)
  • photo sharing (Foto – Flickr like)
  • video sharing (Video – Youtube like)
  • online games (Doizece)
  • classifieds (anunturi.neogen.ro – Google Base like)
  • Business directory (Catalog)
  • web statistics (Monitor)
  • news (Stiri – Google News like)
  • newsletters for their services
  • personal websites (Site – Yahoo Geocities like)
  • online advertising (Asociati and Publicitate – affiliate programs and Google Adsense like)
  • web hosting (Hosting)
  • automotive (Auto)
  • real estate (Imobiliare)
  • internal messaging system for all of the above

Combined, these web properties have 1.8 million registered users in Romania (plus 550,000 in Bulgaria and Serbia) and 3.5 million visitors monthly (according to Trafic.ro, which is the most utilized web stats tracking software from Romania).

Neogen’s acquisition spree brought new web properties to the company in Romania: colegi.ro, doizece.ro, resurseumane.ro, Prohost (hosting), Archiweb (stats), Relatii (dating). They have also acquired services in the countries around Romania: Bulgaria – love.bg, Serbia – Poljubac.com and Moldavia – faces.md.

Recently, Neogen received a capital infusion from Tiger Global Investment USA (which has also invested in Yandex.ru, Baidu.com, Mynet.com, Google.com) and Wouwer Holland. This will enable Neogen to expand more of their services. The same funds made a large investment into eJobs, the biggest recruiting site from Romania.

Netbridge – big investor in Romanian market

Weblog.ro is a hosted blogging solution – although many romanian bloggers have their own solution like WordPress or are using well-known hosted blogging solutions like Blogger.com, Blogspot.com or Typepad.com. Weblog.ro’s parent company is Netbridge.ro, is one of the biggest investors in the Romanian internet.

Among the Netbridge portfolio are the following:

Other Web 2.0 Apps

Trilulilu.ro was the first to enter the video sharing market. But now it faces strong competition from Neogen.

Clipshare is a romanian software solution for video sharing, used by many websites around the world.

myfeedz is an RSS aggregator just released by InterAKT, the well-known Romanian company that built Dreamweaver extensions and was recently bought by Adobe Systems.

MYsport.ro: there are several big sports sites (gsp.ro, prosport.ro, sport.ro, onlinesport.ro, netsport.ro) but what MYsport.ro tries to do is to empower users to create and publish the content. It seems to be gaining traction.

ZuluWriter.com is an online word processor and document manager (it is in the development stages for now). It’s a project of Soft32.com, a very popular software download site.

Bluo CMS is a content management system which was mentioned at the SeoMoz Web 2.0 awards in the Web Development and Design section, along popular things like Ruby on Rails, CakePHP, Prototype and Yahoo UI library.

Google.ro and the Portals

There are several local big portals like:

Other general portals include Roportal.ro, Itbox.ro, Home.ro.

But Google.ro (or.com) is the most used search engine, according to Trafic.ro.

Conclusion

Web 2.0 in Romania is gaining traction at a fast pace – almost doubling year after year. We expect to see more Web 2.0 applications being built and more users beginning to use them.

This post is part of Read/WriteWeb’s continuing coverage of international Web markets. Other countries profiled so far have been Germany, Holland, Poland, Korea, United Kingdom, Russia, Spain, China, Turkey, Italy, Brazil, France, Japan, India, Austria, Sweden, Australia, Hungary, Serbia, Croatia, Latvia, Ireland and Hong Kong.