Update 2: The Hindu has since pulled the story from its website.
Update 1: A Sify spokesperson, in an emailed response to MediaNama, has said that India World “was being maintained only as a legal entity with no conduct of business. Given that it was a shell entity which does not conduct business any longer, it was decided to close it down after three years. This was reported in the last filing with the SEC.”
“The channels of India World, as you rightly pointed out, were absorbed into Sify.com a long time ago. Samachar and Bawarchi are, in fact, flagship channels on Sify.com, and have been re-launched with new formats, with rich graphics and video content. Both are doing very well and growing in usage and revenues.”
Original Story: Nasdaq listed Sify Technologies has shut its IndiaWorld subsidiary reports The Hindu (Update: has been pulled, and is a dead link). IndiaWorld was acquired from Rajesh Jain at the height of the dot com boom for Rs. 500 crores, reportedly a cash and stock deal. Though IndiaWorld, the company, has been shut down, Sify has incorporated the websites – Samachar.com, Khoj.com, Khel.com, Bawarchi.com among others into its consumer business (see Update 1). Aggregator Samachar.com is still live, and received a makeover last fiscal. It is still aggregating content from HindustanTimes, NDTV, The Hindu, Indian Express, among others, and is still being monetized with advertisements. Khoj.com has been replaced with a Google Search; Khel.com redirects to Sify Sports. Bawarchi.com redirects to Sify Food.
What we really want to know is – how is Sify’s consumer business doing? Following Sify’s financial recent financial results we had also contacted the company – twice – for an interview, to get a better idea of the challenges facing their consumer business. No response, so far.
So what we have, is data from an SEC Filing for the period ending September 30th 2008. Revenues from Sify’s Consumer One services had decreased to Rs. 348.57 million, down Rs. 105.81 million (23.39%) year on year. What’s important here is the segmentwise revenue:
— ISP Business: Sify’s ISP business declined by Rs. 106.47 million (26.31%). Of this, the Cybercafe revenues declined by Rs. 59.72 million or 40.33%, due to loss of subscribers and lower usage. Sify Game Dromes revenues grew Rs.7.89 million or 136.74 % in the revenue from Game Dromes due to growth of business
— The Voice over IP services business declined by Rs 26.05 million or 100% due to due to drop in operational cybercafés and drop in prices caused by the competition.
— Broadband revenue declined by Rs 33.60 million or 15.32% on account of lesser utilization as well as loss of accounts. This also explains why Sify focused, in Q4, on trying to retain broadband customers.
— Access related services: Revenues from services related to Internet access declined by Rs. 0.95 million or 19.79 %
— Online Travel: revenue from the online travel business decreased by Rs 2.50 million or 42.22 %
— IRCTC Revenue: Revenues from Sify’s ticketing partnership with the Indian railways increased by Rs.4.25 million or 1148.65 % year on year
— Ecommerce: Increase of Rs.3.16 million or 7.22 % in the revenue from by e-commerce activities due to increased business from the customers
— Portals: Sify’s portal business grew by only Rs. 0.66 million (1.33%) year on year.
Note that these numbers refer to an increase or decrease in revenue for the three months ending September 30th 2008, and are compared with the same quarter for the 2007-08 fiscal. They do give us an indication of why Sify is focusing on retaining its broadband consumer base.