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Chastened Indiainfo.com eyes a resurrection

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CIOL Bureau
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Anshuman Daga

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BANGALORE: Indian consumer portal Indiainfo.com, whose high profile tie-up

with the country's biggest Internet service provider collapsed last year, says

it is glad it was hit before its peers felt the crunch. Slimmer and wiser, it

says it now hopes for an early rise from the ashes by focusing on a few core

channels, sticking to making immediate cash profits and getting into a host of

low-cost partnerships. It has abandoned direct e-commerce.

"Whatever a dot-com needs to do, we have already done. Now, if we make

our ends meet, I'm a happy man," said 33-year-old CEO and co-founder of

Indiainfo.com Ltd, B G Mahesh. Focused measures have helped Indiainfo cut its

monthly losses to Rs 7.5 million ($160,000) in April from Rs 22.5 million a year

ago, Mahesh told Reuters.

Revenues are still at monthly Rs 4.5 million, but Mahesh expects the firm to

achieve breakeven by year-end and page views doubled to 80 million last month

from year-ago levels. Armed with $11.5 million from Morgan Stanley for a 7.6 per

cent stake, an advertising blitz and a planned partnership with India's top

Internet service provider, VSNL, Indiainfo was a late arrival when it joined

India's ‘dotcom’ party in 1999.

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It hit trouble within months, battered by competition from heavyweight

rivals, a loss of faith in Internet firms and a move by state-run Videsh Sanchar

Nigam Ltd (VSNL) to call off a preliminary deal to make Indiainfo its preferred

portal. Its ambitions suffered a further blow when its plans to go public were

scuttled by a falling market. A failed attempt to acquire "India

Abroad" newspaper only added to its woes.

Marketplace too crowded



Though the US-based software tycoon Raj Koneru, Indiainfo's chairman was

admired for his brash entry, the marketplace suddenly seemed crowded with not

enough revenue. Indiainfo's rivals include early entrants Rediff.com, Sify.com

run by India's first private ISP, Satyam Infoway Ltd and Indiatimes.com run by

the powerful, cash-rich Times of India newspaper group.

Mahesh said the portal had funds to last it for about 18 months. But he said

it expected to turn the corner before then, helped by moves such as slashing

staff by 70 per cent to 110 from 350, a year ago. It has also reversed steps to

build a logistical delivery system for e-commerce sales by getting rid of 100

people.

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In content generation, it is focusing on a handful of regional languages and

sections on cricket, careers and quiz buffs. Its regional channels are popular

with overseas Indians. The portal is also using its strong technology team to

make money from consultancy services that account for a third of its revenue.

Advertising accounts for about 60 percent of revenue.

It has abandoned its own channels for direct e-commerce, share trading,

automobiles and technology and instead brought in partners to whom it diverts

traffic which generates revenue. "We're only a platform now. So we leverage

our traffic and get a commission from whatever sales that happen and also earn

fixed monthly revenues," said Indiainfo.com marketing vice-president Sriram

Hebbar.

The portal focuses on partnerships that yield immediate customer gains such

as filemyreturns.com that helps people fill out their tax returns. "Today

what we want to focus more on how to generate revenues from what we have without

adding to costs," Mahesh said.

(C) Reuters Limited 2001.

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