Losses for Nasdaq listed Rediff.com (REDF) continued as the company reported a loss of $1.43 million, as compared to a profit of $0.77 million for the same quarter last year: revenues were down over 40 percent to $4.96 million, owing to a similar decline in India Online revenues to $3.95 million. In Q1 last year, Rediff had reported revenues of $8.32 million. The companyhas reported an Operating EBITDA loss of $1.36 million.
However, the silver lining here is that on a sequential basis, according to the company, revenues grew 11 percent quarter on quarter in USD terms, and 7 percent in Indian Rupee terms.
Details: Financials | Release
Anything that doesn’t indicate a decline in revenues, in this environment, is a positive sign. Rediff is cautiously optimistic, though: CEO Ajit Balakrishnan has said that “The economic environment for online advertising in India continues to be challenging. Indian advertisers in the credit card, home loan, online travel, jobs, matrimony, shopping and real estate segments who normally account for about half of all online advertising in India continue to face difficult business conditions”, much like he has in the last two quarters.
Costs Expected To Increase
Apart from revamping the look of their site Rediff.com, Balakrishnan has said that the company has adopted a RESTful architecture (mentioned in the earnings call last quarter), and enforced a common data model across all their services, which improves scalability. However, these initiatives, among others, will mean that the company has to increase investment in product development and brand building over the next two or three quarters: the guidance of an increase in operating expense by an average of $1.0 to 1.5 million per quarter over this period, given last quarter, still holds.
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