I would invest, depending on price ofcourse. I think they have put together a great mix of sites. I am not too happy about some of them (in.com) and they may need to add a few more. I think they can do a far better job of integrating all their services and offerings, look at the mobile space more aggressively.

No silly investments in gaming/social networking and other related hype.

If they fix some of the above and view their business as a share of wallet spend visavis their existing model of just looking at advertising revenue, they should do very well. First business on the online space probably worth investing in.

I would invest only because of the fact they have the shortest domainname for an email id (in.com).

aol.in is also 5 letters Mouli

In India, the internet users do not have a mind of their own when it comes to Social Internet Behaviour. If the crowd is on Orkut today, they will be on facebook tomorrow, in.com the day after and some other new site in a month from now.

In.com without the users is of no use to an investor. They dont have a revenue model and their marketing strategy is quite bad. We all know how moneycontrol.com lost traffic because of in.com promotions which in turn helped other finance sites grow.

I strongly believe that in.com has nothing unique to offer and like rediff and indiatimes they too will saturate.

I would rather invest into naukri then take a chance with in.com

Ranjitha

How does one read the table given here? What is Q309, Q209 ?
I thought we were in Jan'09 !! Can we get the labels correct ?

How much of this revenue is Advertising and how much is Wcom topline from homeshop18.com

the labels are correct. Thanks for the feedback – will work on simplifying the terminology. Q309 refers to the the third financial quarter of 2009 – starts October 1st 2008 and ends December 31st 2008. It's Q3-09 because the year ends in '09.

but you're right – we should simplify the terminology. thanks

Alok' comment is a give away to the big problem at Web 18. The whole structure is built around generating valuations, with no long term sustainable strategy for leadership in place. Which is probably explained by the immensely top heavy nature of the whole group too.
While In.com and the others are decent properties'not great by any stretch), as you pointed out, the big question is, at what cost? There are smart internet players in India who I suspect could create something equally big and interesting at 35% of the cost. Even an industry site like afaqs keeps doing new things without any self congratulatory noises, ditto for cricinfo among large sites , or even a rediff, which seems to be making the dollar go further finally.
I think Homeshop18 is the surprise package, which could run away with the leadership if handled well, but that is also probably the business with the lowest margins.. So effectively, on currne tstrategy and results, even the most optimistic way of looking at Web 18 would be to consider it at a low PE level of 3-5 till 2012 at least.

Agreed… everything depends on price… I would be ok with the price of US$100-120 mn range, given the nascent stage of business and segment (Internet is only 2-3% of total ad spends in India)… management has been quoting absurd figures and I think they are unlikely to see that in the next 5 years unless we see another crazy bull market, or India achieves its target of over 100 mn internet/broadband users (equally unlikely)… moreover, I would expect them to go back on the drawing board and revisit some of their websites… ie, should they close/ restructure some of the weak ones…

AcK

Pretty much all is advertising (90%)…
Hopeshop18.com is not part of this company… it is Raghav Bahl's personal venture…
This is another issue with NW18 group… so many companies/subsidiaries and so much chop and churn that you have very little idea whats going on (at one point in time)…

Ack

I don't think HS18 is his personal venture…It's a part of the NW18 group, else the stock exchanges would not be updated on HS18 funding, right? Interestingly, Tangerine Digital was RBs personal investment before Capital18 invested in it.

Interesting. My sense is that they won't list without reporting a profit, so they'll really have to push sales, and try and cut down on costs. In.com, with all that advertising push, must be a significant cost center.

Its not like Indian businessmen have listed entities only when they made a profit.

the reputation RB has is that he prefers to share growth in valuation hence all the ESOPs that get handed out – while people do become rich and the organisation focused on valuations it could encourage short cuts and cover ups like we have seen in the case of satyam and enron.

contd…

contd…(Nikhil we need to fix this splitting of comments)

I clearly dont see advertising revenues going up in the next 12 months. Transaction revenues that were coming from ecommerce are dropping, carriage fees of new channels (HS18) would render that business unviable for the time being. But I am sure they have something on their mind already. Also its would be good remember that the current situation is an abberation and will last probably only 12 months so to keep investing and growing is critical. The challenge is the media industry has been very narcissist and has never looked beyond its nose (the telecom industry is also learning fast).

However, there are other unconfirmed stories in India of unsecured loans from ailing banks, promoters buying company stakes independently and then selling them at a significantly higher valuation to listed entities etc. that its important specially in todays environment to come clean on buys, sells, holdings and cross holdings not just for the new entity but groups as a whole.

Guys – lets give the internet companies a break. We know the likes of established players like rediff.com and fast growing upstarts like web18 have both reported losses and in both cases, it is a case of an advertising revenue led model. but are things any different on the same front with other internet companies like indiatimes / sify / cricinfo / yahoo? i dont quite think so – they are all going through the grind and probably all suffer from shrinking revenues and expanding costs. And what about TV and print? are they not hit too. We need to realize that most of these companies are ad sales run and make bulk of the revenues from the same advertising dollar.

whats cool about these internet companies like yahoo, web18, rediff for instance is that they make way more money than a whole load of niche channels e.g. discovery travel and living / history channel etc and all of this in the last few years only. and they clearly make more money than a whole load of other magazines in the space. In a few years, these internet companies will be a force (in their own might) to reckon with and with a lot of advertisers turning more of their attention to the digital domain – the future looks good.

I may also consider investing in web18 and rediff (this is a real good buy at the current stock price which is below $2). When a company runs 16 or 20 or whatever number of websites / channels / newspapers etc. there are bound to be winners and losers in that portfolio. Is that not true of BCCL and Star TV? so why expect anything more different from Web18. After all, they do have winners in IBNLive, Money Control. Also, on in.com – we have seen several companies spend more money than in.com but come nowhere close to the reach delivered by in.com for a consistent period of 4-5 months. Check zapak for instance!!! In a Yahoo, Rediff, google and Web18, we clearly have the big 4 emerging with the challenege being played out at #3 and #4 between web18 and rediff and the #1 and #2 between yahoo and google. It will be a really interesting space to watch global fight local (yahoo and google versus rediff and web18) AND experience fight new blood (rediff versus web18).

interesting take, good effort but not good enough! Each niche channel replays content pre-created and so when aggregated globally makes a lot of money.. way more than what global internet companies like rediff etc.

Specifically in India, the lower cost of content and operations makes up for the low revenues they make and probably are mostly profitable or have very low rates of burn.

The challenge of the web is that these sites are dependent on the customers coming to them where as in the TV & Print world, they go to the customer. Cost of customer acquisition and repeat consumption is what kills the business model of the internet and will continue to do so.

Investing in a "random" internet company is like buying land in the sahara… everyone knows its there.. no one wants to go there.

Not too sure if I agree with the Sahara land. Its more like buying desert land itself – like the gulf region – but buying it in the 1960's. You would have been happy today as well as in 1975.

Channels have loads of costs like transponder costs for satellite transmission + carriage fee (never disclosed, but rampant) and a lot of them e.g. MTV, Channel V, AXN etc have local content. Imagine these guys making 50cr in ad revenues???? or even 30 for that matter. though channels like nat geo and discovery use international programing, the licensing costs are clearly passed on to the region and these are not cheap by any stretch of imagination. Guys at disney / mtv etc will vouch for this.

I cannot seem to understand the cost of customer acquisition point being made – but i know of many million people who go to a set of websites often enough for advertisers to look at this medium as a potential engagement tool. BTW – how many channels are profitable (keep SUN out) today??? are their excel sheets any different from the internet company excel sheets?

Right… NW18 has some investment in HS18, but directly and not through TV18/Web18… this is the point I was trying to clarify since the discussion was on Web18 listing… only goes on to prove the point that it is very difficult to keep track of various NW18 investments and which group company is into what at any point in time…

AcK