“Is Everything Alright With Rediff?” Asks A Reader

This is a reader’s (Ish’s) comment which we are posting in toto, unedited. This is in response to our post on Rediff Q2 results. The comments are not very kind to Rediff.com, India’s premier news portal. But we would like to see a meaningful debate (not frivolous) on this if other readers can join it. Ish’s comments are below:

1. Rediff is not a prime property (candidate) for M&A, mainly because it has frittered away its first mover advantage to others who came in later and was less differentiated. For a company in its 10th year to show marginal profits only now is bad news. When all others in its space is 5x revenues.
2. Their entire mobile division has been decimated by departure of their VP (in less than 6 months of his joining). The revenues of the mobile division are pitiful and below the targets set internally. The whole strategy was haphazard and day-to-day survival-driven.The P&L of their mobile division would be disastrous if one was so available (for hire).
3. They have squandered money on mobile rights acquisition of several movie /music properties, with no clear and visible commensurate revenue stream.
4. The path to growth is via mobile content/delivery a la Yahoo, Sify, etc and not just internet-driven revenues. The internet population in India is 25 million (IRS R2) while mobile population is 65 million! No rocket science as to where the growth will come from.
5. Finally, they are in a leadership vacuum, no vision for the the company, no urgency to carve out the next big thing and define/create new markets/needs. When that happens you are as dead as a dodo, and will trundle along to miniscule Ebitda growth (Hindu rate of ebitda growth!).
Therefore a prime company for a venture buyout! Any takers?

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