Last week, I met people from IndiaTimes, one of the biggest portals in India…the portal is owned by the Times of India Group, the “Time Warner of India”, and whether you like it or not, IndiaTimes has a lot of parallels with Pathfinder, the TW blackhole…(majority of the content for the portal comes from TOI-owned newspapers and magazines).
During discussion with Mahendra Swarup, the CEO of Times Internet Group, some interesting facts emerged…I asked him whether the portal is profitable, and he said yes, but it depends on how you account for the profitability. Much like anywhere else in the world, it is difficult to account for things like bundled deals, cross-selling, e-commerce revenues etc…
I asked him about the revenue streams…I was surprised to learn that the majority of revenues come from mobile content like ringtones, premium rate SMS etc…online advertising has a very small share. In some senses, the situation is a bit like China, where the triumvirate of Sina.com, Sohu.com and Netease have a similar revenue split…it is a simple matter of numbers…the telecom market in India has exploded, as the handset and call prices have come down dramatically…
Swarup said that the miniscule amount of advertising they get is upsell…the effort and cost required to get that advertising is more than the ad revenue they get in the end…methinks the attitude is slightly defeatist, but then the Indian ground reality is very different from idealism…
The difficulties for developing revenue streams are endless: the computer penetration outside of work is abysmal, for now. Most of the audience outside of work accesses the Internet from net cafes, which makes tracking an interminable minefield…the access speed itself is bad, outside of big cities, hence making the loading speeds long…
These factors make the going heavy for India portals, outside of mobile revenues…
Among the audiences Indian portals target (and yet they haven’t been able to pin down) is the expatriate Indian population, which by any count is formidable. And the problem only starts there…outside of India, the Indian community is a bit of a myth…most of the people identify themselves along state/caste/language/religious lines, and hence targeting content towards the diasporas is a huge investment…IndiaTimes has been rather lukewarm to developing these revenue streams, no wonder.
I am off to Chennai (fka Madras) to spend couple of days at Sify.com (another big portal in India) offices?sort of like a lecture/interactive discussion…would be very interesting to compare the business models of the company versus IndiaTimes and the likes of old favorite Rediff.com.
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