Question: When was the last time Rediff.com reported a profit? Answer: The quarter ending June 30th 2008*, making it 18 quarters (four years and three months) of losses.
In the current quarter, Rediff.com has reported revenues of $3.97 million, 18% less as compared to $4.81 million in the corresponding quarter last fiscal year, and a 3% increase over $3.84 million reported last quarter. India Online revenues for the quarter were $3.2 million.
The operating EBITDA loss was $2.0 million, higher than the loss of $1.73 million in the comparable quarter last year and the net loss stood at $3.0 million, although that included a goodwill impairment charge of $2.0 million arising from India Abroad, the second writedown Rediff has taken on the paper, although that too was offset by a gain of $1.4 million from the sale of an undisclosed investment.
While the exchange rates has changed significantly since 2008, Rediff had reported revenues of $8.32 million in its last profitable quarter, of which India Online revenues were $6.56 million, which included $5 million advertising revenues. Now its overall revenues are a fraction of that.
This begs the question: can horizontal portals in India be profitable? We know that Rediff has increased branding spends over the last couple of years, but as you can tell, revenues has been on a continuous decline, so it clearly isn’t helping. Rediff Founder Ajit Balakrishnan keeps pointing towards the impending growth in India with the increase in Internet usage, but clearly, despite mobile Internet usage increasing, and the Internet economy coming out of a bit of a slump in 2009, 2010 and 2011, Rediff hasn’t benefited from this.
Can online advertising really support news portals in India?
Some notes from Rediff’s press release:
– Online advertising business in India grew approximately 7% (in dollar terms) on a sequential basis.
– Revenue from Rediff.com’s online shopping marketplace business grew 11% on a quarterly sequential basis and is now up 85% year-over-year, while maintaining a positive margin of 12%.
– During the quarter, the range of products listed on the Rediff.com marketplace grew 7% from 172,000 SKUs to 184,000 SKUs.
– Vubites: Vubites added three new TV channels to its distribution network in the third fiscal quarter of 2012 and now can reach up to 80 million individuals, while enabling local merchants in 10 Indian cities namely, Delhi, Mumbai, Pune, Ahmedabad, Baroda, Surat, Mysore, Bangalore, Indore and Jaipur, to advertise on seven National TV channels – Zoom, NDTV Good Times, Times Now, ET Now, UTV Movies, Bindaas and ABP News at a city level. Local TV advertising was launched over the past year and has helped offset some of the weakness seen in the overall advertising market due to the economy, though there are signs that certain verticals are returning to more historical spending patterns.
– Rediff’s Mail and News are now available in the form of mobile apps on Android, iOS, Blackberry, Windows, Symbian and Java platforms.
*- Incidentally, Q1-FY09 was the quarter in which MediaNama was launched (June 27th, 2008)