Sindibad released its first business report on internet and technology startups in the Arab World this past week, aiming to provide the region with an overview of investments in the sector. The report shows a breakdown of investments made from January 2010 up until the end of August 2011, by country, number of jobs created, investor, and by sub-sector in the case of group buying.

It’s a step in the right direction, as the region needs more research aimed at describing investment over the past few years and giving an overview of trends in both startup focus and investors’ preferences.

Unfortunately, however, the report has central methodology issues that make it difficult to trust the data.

You can download the Sindibad report on Wamda here.

Here are a few things that we would love to see improved in a future report.

1. It could provide a balanced view of environmental influences.

The report cites five major reasons for increased investments in the Arab World: the effect of the 2008 economic crisis on reducing perceived risk of internet companies, the precedent set by the Yahoo! Maktoob deal in 2009, the rise of group buying in 2010, the emergence of technology company incubators and accelerators over the past year, and the Arab Spring of 2011, which highlighted the power of the internet.

While these forces have clearly contributed to shifts in the investment environment, it’s simplistic to discount the effect of the economic crisis in driving populations back into seeking secure government jobs, and the ways in which the Arab Spring negatively affected local markets and public perception of the private sector on the whole.

2. Its section on Arabic content opportunity is light on analysis.

While the degree to which Arabic is used on the web may be increasing as internet penetration rates increase, Najeeb Jarrar of Google and others have pointed out that the real issue is not the creation of Arabic content but its indexing and curating.

3. It could dig deeper.

The report notes a lack of general data on industry size, growth, and trends. We here at Wamda are the first to admit that there is a gap in the market when it comes to reporting on startups in the region; it’s a problem that we’re hoping to solve.

Yet a report released to document the investments made should go beyond sifting through reported media, and should involve comprehensive investigation starting with the investors themselves. Sindibad acknowledges that “that there are some investments that we missed due to lack of information and data on them,” yet listing only 5 investments made in Lebanon over the past year and a half is a surefire flag that there are gaps.

A cursory overview reveals investment in Rifflex by Seeqnce, Active Identity by Berytech, and Multilane SAL by MEVP Partners to be missing from the list. It also omits investments made by MENA Venture Investments, Fadi Ghandour’s fund. Any startups missing from this list should add themselves in our comment section.

4. Its aggregate estimates seem low.

Without a concrete methodology to follow, it’s simply hard to gauge the accuracy of their statement that total investment in the internet industry over this time period is estimated at 24.2 million dollars, and that investment in UAE startups comprises the biggest share of these investments, at $ 11.5 million. That seems extremely low, not just in light of the size of funds now operating but also by the fact that deal flow in 2008 approached $70 million.

5. It needs to distinguish between types of investors.

The report lumps incubator Oasis500 in with venture capital companies, and cites one investment made as “individual investment,” but fails to mention the role of angel investors or address any other angel investments made during this time. It also lists LivingSocial’s acquisition of GoNabit as an investment; this is simply misleading.

Sindibad’s report is a great start. Yet currently it serves as call to investors to offer more transparent data, and to analysts to chase down the accurate numbers.