"The Times group...is set to spin off some of its Internet properties into a separate company for a Nasdaq listing this summer," the Times said in a statement. "indiatimes.com...is among the sites that will be transferred to the new company." All internet properties are currently under Times Internet Ltd.

The group claimed that indiatimes.com and related portals report page impressions of 40 million a month. Page impressions refer to the number of Times users requests an Internet page. "Along with the group's other sites, it (indiatimes.com) generates 40 million page impressions a month." The statement quoted managing director Vineet Jain of the group as saying that Times would be the Yahoo! and Amazon.com of India.

"New York Times should have been a Yahoo!, Barnes & Noble, Amazon.com. The Times Group woke up early enough and now we will be the Yahoo! and Amazon.com of India," he said.

What has interested analysts is the timing of the announcement. Coming close on the heels of reports of Nasdaq/ADR listings from Rediff.com, Indiainfo.com, Zee Telefilms, Dishnet-DSL and MTNL, a lot of heat is bound to be generated.

It may be recalled that late last month, the board of Zee Telefilms cleared a proposal for a $1.5 billion ADS to strength distribution, expand Internet access and acquire content. This is the largest of its kind for any Indian company. There are reports streaming in that Rediff.com will list its ADR by early April. The FIPB had cleared an investment proposal by the company to raise $74 million through the issue.

Says Arun Pai of Arthur Andersen: "What is hot right now is media and content. And a media content portal like indiatimes.com is a good story." But, he says, the risk of too much Indian paper flooding the markets is high. Which is why the timing of the issue is going to be crucial.

Pai adds that given the fact that the Times group has a strong marketing network in place, the chances of it finding favour with investors are high. Given this reality, he says, it may be on a better turf than competitors like Rediff.com and Indiainfo.com which do not have a strong offline presence like the Times group has.

When contacted, Ajit Balakrishnan, founder of Rediff.com said that it would be "inappropriate on my part to comment."

Interestingly, only the umbrella portal of the group, indiatimes.com, has been valued at $5-7 billion, according to a spokesperson for the group. The other online properties of the Times Group, which include the online versions of its print editions, are yet to be valued and no final decision has been taken regarding their listing.

"If we look at our other properties, the valuation will be much higher", says Sumanta Pal, brand manager of Times of India Online. He added that the Nasdaq listing, "at this stage referred just to indiatimes.com".

Pal added that other details could not be revealed as, "We don't want to get into the nittygritty at the moment". Once the listing date is finalised, then we will be in a position to reveal the plans," he added.

Three top merchant bankers are believed to be in the race for being appointed lead managers to the issue. The exact date for the Nasdaq listing will be firmed up in the next fortnight. The listing will not happen before July-August.

The group's Internet strategy is under close scrutiny by both media and non-media outfits. The ostensible reason being that the danger of online revenues cannibalising that of print is a very real one. Which is why, Pai says, the revenue model indiatimes.com has in place will be crucial. While little is known currently either of the group's revenue model or its expansion plans, in an earlier interview with The Financial Express, former chief of Times Interactive Sunil Rajshekar, who is currently with Indiainfo.com, had said that indiatimes.com is moving towards a transaction based model. It is not clear whether this strategy has changed since his exit.

It essentially boils down to creating a platform for advertisers to spend and subscribers to buy directly-with commissions from these transactions being the most tangible revenue stream.

But that, he had said, were long term revenue streams and that actual returns would be at least three years down the line. In the meantime, he had indicated, building a base of 50 million visitors would be the group's objective and that would amount to a fair return on investment.

In terms of contribution to the group's bottomline, he had pointed out that while the interactive division currently contributes less than half a percent, over the next five years, it ought to bring in anything in the region of 5 to 10 percent of total turnover.

INSIGHT :
Move may queer pitch for others

This is the first attempt by an established media company to unlock the value in its internet properties. The synergies available between the various delivery arms of established media companies, and their access to a huge amount of content, give them advantages not available to pure dotcoms. True to all Internet valuations, this valuation too will be more a function of the company's promise rather than existing revenues and profits. The announcement may, however, queer the pitch for other Indian companies who have lined up ADRs, since a large amount of Indian paper will be listing in Nasdaq in the near future.

-- Mobis Philipose