Rediff (NSDQ: REDF) CEO and MD Ajit Balakrishnan said during the earnings conference call that there’s pricing pressure in the performance based advertising segment which constitutes a third of Rediff’s India online advertising revenues. Customers, particularly VC funded startups want lower Cost-Per-Clicks, because of which Rediff has responded with better (lower?) rates. Balakrishnan said that it’s probably happening across the market, since three players – Rediff, Yahoo (NSDQ: YHOO) and Google (NSDQ: GOOG) decide the rates in India. Rediff intends to work with advertisers to increase click-through-rates, even at a lower CPC, and intend to redesign its advertising platform, which it believes will strengthen its position in Search advertising and the Ad Network segments. 2/3rd of the India online advertising revenue is from display ads.
The company has reported revenues of $8.53 million for the Quarter ended 31st 2007, an increase of just 10 percent over revenues for Q3 last year. For the second quarter running, net income declined – at $1 million for Q3 2007 ($0.0345 cents per ADS) as compared to $1.51 million ($0.052 cents per ADS) for Q3 2006. This is despite an increase in interest income – at $1.39 million, up from $0.94 million for the same quarter last year. Balakrishnan was also asked about plans for a buyback of shares, which he said is not on the cards.
The company’s registered user base grew to 62.7 million from 59.8 million last quarter, an increase of 2.9 million (4.84 percent). Pageviews grew by 94 percent year-on-year for the site.
India Online revenues increased by 8 percent to $6.12 million. The number of companies advertising on Rediff grew to 230, up from 190 advertisers in Q2. Travel, Consumer Finance, Employment, Matrimonial and IT Products accounted for 50 percent of the India Online advertising revenues. I think it’s good to note that the dependancy on its top 10 advertisers is reducing: down to 37 percent of advertising revenue, from 62 percent for the same period last fiscal. Their video platform – iShare, has a million and a half active users a month. Balakrishnan believes that the only competitor for iShare is YouTube, and they don’t see any competitor in the Indian market yet.