Mumbai: Indiainfo has caught the attention of the masses through its aggressive ad campaigns. The company hasn't made profits to boast off but definitely has revenue streams in place. Company president Sunil Rajshekhar would like the company to be called an integrated Internet company because its business focuses on various segments of the Internet value chain. The company focuses right from hosting Websites through another company, Kodenet, to back-end business and from selling Internet space to the business of media aggregation, which is the portal itself, the effort is community-building and to drive commerce "and then we have as an extension to commerce a lot of B2B activity", says the Indiainfo president.The company, promoted by US-based Indian Raj Koneru, has plans to get listed on the Nasdaq sometime this year. Rajshekar, however, refused to elaborate on the ADR issue and said the norms of Nasdaq listing did not permit them to spell out details. The company recently signed a merger-agreement with India Abroad, a newspaper in the US. The final merger, however, will be at the time of the IPO.
Rajshekhar spoke to The Financial Express at length on Indiainfo's plans and also on issues that dominate the Internet world. Excerpts.
What has been Indiainfo's focus?
We are essentially a media company in the Internet space involved in the business of aggregating content, packaging audiences and selling them to advertisers. Primarily, our effort is to attract customers through content. We have to retain them with the kind of stickiness that we like to build in both, as a combination of content as well as technology to deliver content.
From valuation to `e-valuation' is the new buzzword for venture capitalists. Nasdaq's recent dotcom-correction (from dramatic highs to realistic levels) was after realisation that stock prices were primarily based on future earnings. What is your view on this?
Investments to a great extent have also been speculative. What is important are those Websites that started not because of the valuation game but have been able to evaluate their strategies themselves. Besides, they have been able to work on a business model which brings in audience, builds community and revenues. Those Websites that already have that regardless of what an investor thinks, of valuation or evaluation, are on a strong footing.
On Nasdaq, the stock market is essentially based to a great extent on sentiments. There are real businesses which are evaluated on the basis of their existing bottomlines, there are new companies, essentially the Internet ones, which have to be in a position to build on revenues and show profits. And nobody is going to be in a position to show profits in year one, be it Internet or any other media company like television or newspaper.
Are entry barriers too high today?
Entry barriers used to be low at one time but now with more investors coming in, the entry barriers have become a bit difficult. This means more investments and more spending for models that may not even succeed. I would say for every 10 sites, at least eight are doomed.
The cost is high also because initially at one stage if you had an idea you could develop on that with a couple of lakhs and build on that. Today it is not the same, there are millions of Websites and even if you have a great idea you have to be in a position to attract attention. You need that because you are fighting to get everybody's click on your site and in doing that you spend a lot on advertising and promotion.
How is the competitive edge created amongst dot.coms supplying similar kind of content?
One, if they are exactly the same, there may not much of an USP. But eventually being the same in looks is not enough. Servicing the customers is the key.
Services can be aped. Where is the USP then?
It is not easy to ape something that involves service. If one is in e-commerce where the goods promised aren't delivered on time then success remains a distant dream. So it is not just having an Internet site and all that information but how effective the service is.
That means to give that kind of service, does one revert to brick and mortar warehouses?
Of course. But there are various ways to go about it. Having brick and mortar warehouses just like Amazon.com where the business has become really big, makes sense. Then there is no choice but to really begin looking at warehousing the goods you sell. But when you are making a beginning, there are ways where you would be in a position to tap other large distributors, retailers for selling their products.
What's the status of dotcoms in India? Are they generating revenues or fudging figures?
Nobody can ever afford to fudge figures or get into a situation where they show something that does not exist. Companies heading towards listing, and ours is one of them, will not indulge in such tactics.
Are dot.com-revenues through advertisements largely trade offs?
I cannot say that. But we haven't resorted to such gimmicks. We have an advertising, network, called Indian Impressions.com. Now the task of that company is to sell advertising banners and space inventory for Indiainfo network as well as on behalf of other Websites to act as a representative for that. Talking about the barter system, there are companies which do that in terms of getting advertisers, sponsoring events and running their banners. In the US there are partnership which are not financial transactions as much as exchange of equity or advertising support.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.