Anshuman Daga
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.
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.
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.