Zapak Breaks Even: $3M In Revenues Last Qtr, $1M From Advertising

Reliance Entertainment President Rajesh Sawhney has disclosed that Zapak, the online gaming businesss from the Reliance ADA Group had reported revenues of $3 million for the last quarter, and has broken even. What’s interesting is that only $1 million of the revenues were from advertising: Sawhney told MediaNama that the rest was from other revenue streams like subscription, and in particular - Events.

So it appears that Events are becoming a major component of Zapak’s business: a couple of days ago, the company announced the Zapak Gaming Championship with Gillete Mach 3 Turbo Winner razor as its headlining sponsor, and with total prizes worth Rs. 1 crore. Prior to this, they had organized the Zapak Corporate Gaming Championship, with Timesjobs as the lead sponsor, and gifts as prizes. Zapak claims a registered user base of 6 million users.

What we’d really like to know about, is how much money Zapak is earning any money from in-game sales - are users playing its Massively Multiplayer Online Game paying to upgrade their racing carts, buy avatars etc., or are they just being given upgrades as prizes or for loyalty? The fact remains that while revenues may be coming from the offline component, the opportunity for scale exists on the Internet - online advertising and in-game commerce should be its primary source of income, and that doesn’t appear to be the case. Dependency on offline events alone will limit Zapaks revenue growth - how many events can they do in a year?

In Dire Straits, Live Current Media Raises $2 Million; No MG for CLT20

Live Current Media, which owns the domain Cricket.com and had won the portal rights for the Indian Premier League, has raised $1.06 million via private placements with CEO Geoffrey Hampson, President and COO Jonathan Ehrlich and Chief Corporate Development Officer Mark Melville. Another tranch of up to $1 million is expected within the next 15 days. The money will be utilised to meet the payout to the Indian Premier League, and for the development of the companys Perfume.com business.

Their 10-Q filing makes for worrying reading: LCM ended Q3 with negative working capital, after having reported seven consecutive quarters with substantial losses. What’s more, they expect to continue to make losses, as they intend to spend money in marketing, and on Global Cricket Venture (GCV) - their JV with Net Link Blue Holdings.

In order to address short term liquidity needs, the company plans to sell six domain names - Brazil.com, Vietnam.com, Indonesia.com, Malaysia.com, GreatBritain.com and Communicate.com, which they expect will get them $6-10 Million…enough money to last them till the end of 2009. LCM has over 800 domains.

Earnings
LCM has also announced earnings results for the Q3, the quarter ending September 30th 2008: They’ve reported revenues of $1.95 million, around $1.93 million of which is from their Perfume.com business. We hadn’t expect much from the Cricket related businesses - the IPL wasn’t operational during the quarter, and Cricket.com and BCCI.tv have only just been launched. BCCI.tv is the site for national Cricket, which hardly generates as much interest as the IPL or international Cricket, so don’t expect much from that site either. 

They incurred a cost of $1.01 million related to the MOU with the BCCI and the IPL, and establishing Global Cricket Venture with NLB. During Q3 these costs totaled $276,485, $678,221 in Q3 and $55,317 in Q1.

More on the Champions League T20 Deal, BCCI Deal, and details of the formation of Global Cricket Ventures

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Rediff CEO On Current Advertising Scenario, In.com, Paid Services, Apps & Content Deals

Much was expected from the Rediff.com this quarter - as the leading online media site in India, and with around 75% of its India Online revenues dependent on the Advertising - we logged on to Rediff’s earnings call for inputs on spread of the Advertising drought:

Data
– India Online Revenues: $4.04 million (72%) from Advertising , $1.58 million (28%) from Fee based services.
– Advertising revenue split: Financial Services - 15%, Jobs - 15% and Travel - 10%, account for a total of 40%
– 70% of revenue is from display based ads (CPM), and 25% from performance based ads.
– Registered user base of 72 million. Unique userbase grew by 8.4% (Comscore)
– 261 companies advertised with Rediff in Q2, up from 257 in Q1.

Q&A (thanks to @mixdev, @codelust, @ranjanv and Shashikant for their questions)

Online Advertising Scenario
– India Online advertising, which accounted for around 72 percent of revenues this quarter, was down from 75% last quarter, though “on a blended basis, the average yield and average price have not changed.”
– “There’s been no substantial change as compared to Yahoo or Google. We believe they’ve had a similar experience in the market.”
– Financial Services used to spend with Rediff for acquiring Credit Card and Housing Loans, and had contracted the most, but are improving - they’re looking to advertise to get people to deposit money again. Travel portals have cut back sharply, because commissions for them have been slashed. Job sites, which accounted for 15%, are down as well, because of their dependence in IT services for recruitment.

Display Ads over the next 3-6 months?

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Rediff.Com Reports Net Loss Of $0.42 Million; India Online Revenues Up In Rupee Terms, Down In USD

Note: Any questions for Rediff - do let us know in the next 20 minutes either in the comments here, on email or on twitter by responding to @nixxin

Nasdaq listed Rediff.com (REDF) has reported revenues of $7.32 million for the Quarter ending September 30th 2008, down 12.02% from $8.32 million last quarter, and 6.87% for Q2 last year. An insight into the Indian market comes by way of Rediffs India Online revenues (from Rediff.com) - which were down 14.33% quarter on Quarter, and only down 1.92% year on year. Ajit Balakrishnan, Chairman and CEO of Rediff, however, said that the India revenues grew 5.5%, year on year, but this is not reflected in the numbers due to the the weakening of the Indian Rupee

It’s disappointing to note that the decline in Rediffs profitability has continued - they crossed the line, and have reported a net loss of Rs. $0.42 Million for this quarter. Last quarter, they’d reported a net profit of $0.77 million, and $0.83 million for Q2 last year. Profits have been declining for five quarters now.

More as we have it

Q209: Financials, Release

Q109: Financials, Conference Call, Release | Analysis/Report
Articles related to Rediff

IPTV Co IOL Netcom Turns A Profit; Looks To Raise Funds Through QIB Placement

To say that it’s been a good quarter for IOL Netcom would be an understatement - the IPTV company which is also in the WiMax and Voice over IP businesses, for the first time in many-a-quarter turned a profit. IOL Netcom has reported a net profit of Rs. 73.11 lakhs, coupled with a substantial jump in revenues - at Rs. 14.19 crores, up from Rs. 3.04 crores last quarter. Remember that they had reported a net loss of Rs. 9.68 crores last quarter. The reason for this substantial jump in revenues is not known, but going through IOL Netcom’s annual report, I did notice that they were owed Rs. 5.18 crores last fiscal. We’ve contacted IOL Netcom for more colour on this substantial increase in revenues. Remember that Lehman Brothers owns around 1.46% in the company, while Videocon has picked up around 14% in the company - 12.26% through Shree Dhoot Trading & Agencies Ltd. and 1.83% through Videocon Realty and Infrastructure Ltd. QIB Placement (more…)

Northgate Reports Q2 Profit Of Rs. 22.4 Crores; Bharatstudent FY08 Loss At Rs. 3.96 Crores

Northgate Technologies, which owns the social networking site Bharatstudent.com, Online Advertising network Axill, and VoIP and IPTV solutions provider Globe7, has reported a consolidated profit 22.40 crores, up marginally from Rs. 22.43 crores last quarter, and Rs. 20.21 crores for the Q2 last year. Northgate Technologies, by itself, contributed only Rs. 3.6 crores, down from Rs. 6 crores last quarter. Consolidated revenues for the group were up at Rs. 189.37 crores. A majority of the groups business revolves around Online Advertising, and there’s been a “Traffic Acquisition Cost” of Rs. 102.14 crores, down from Rs. 107.05 crores last quarter.

The consolidated results include digital subsidiaries of Northgate - Social Media India Ltd, which runs Bharatstudent.com, Northgate Investments Pte Ltd and its subsidiaries Globe7 Pte Ltd, Globe7 Inc, Axill Europe Ltd and Globe7 HK Ltd.

We also went through their annual results, in particular, seeking more information on the performance of their subsidiary Social Media India Ltd, which runs the social networking site Bharatstudent.com. This are rather bleak there -

For the year ending March 31st 2008, Social Media India reported revenues of Rs. 9.85 crores, and a net loss of Rs. 3.96 crores. All in all, Northgates Online Media Properties’ (OMP) contributed 18% to the total revenue, and were at Rs.100.21 crores, with an EBITDA margin of 13.4% in FY’08, down from 27.3% in FY’07. Northgate launched Ziddu and Egglad in FY08, and saw an increase in marketing and promotion activities.

Q209: Financials,
Q109: Financials, Analysis/Report
FY08: Annual Report

Related:
– Q1-09 Results: Bharatstudent.com Parent Reports Rs. 22.43 Crores Profit; Globe7 - Baidu; VoIP Over WiFi In HK
– Northgate Co Globe7 To Power Casual Games Site For Malaysia’s New Straits Times

Q209 Call: OnMobile Says Deployments Have Slowed; Telisma Vs Nuance; AdRBT

The Content Costs
When asked about the increase in content costs, which we’d pointed out in our analysis of their Q2 earnings, OnMobile Global CEO Arvind Rao said that this is a “fixed monthly fee that we’re paying is to a third party which is giving us some services which are used for launching a new project or a new product that a very large, but will not be rolled out until next quarter. That is a line item, which has no link to our existing revenues. It’s fixed on a monthly basis, based on certain parameters and results that they have to deliver to us.” Our sense (this is not officially confirmed) is that these are payments being made to the content partners that OnMobile has signed up in South India, and it corresponds with two significant deals they’ve struck - for powering the Ringback Tone (RBT) platform for Airtel in South India, and for du in the UAE.

Revenue Split
15-20% from data products
35-40% from voice portals etc
35-40% from RBT etc

AdRBT
Very little on the AdRBT: OnMobile expects to complete the test launch of AdRBT with Vodafone by the end of November and declined to share details of the results in the interim. They’re going slow on AdRBT in order to iron out the bugs, based on usage trends from the pilot. Results are encouraging, says Rao - “the numbers, based on consumer recall, are better than for the Internet.” Mobile Marketing SBU has around 20 odd people, who are working on two very large projects.

Impact of the slowdown?

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