Web18, the Internet company from the Network18 Group has given some of its employees the option of signing up for the Employee Stock Options Scheme, MediaNama has learned from multiple sources. On being contacted, Surya Mantha, CEO of Web18, declined to comment on the development, or ratify some of the details that we have been told about. According to our sources in Web18, employees are allowed to sell 25% of their holding each year. The shares are being given at a face value of $1 each.  In case they leave the company, the remaining options will lapse.

The options will be worth something only if Web18 goes in for an IPO, which is what they have been building up to for the last couple of years. They’ve bet big on their aggergator In.com, and have been in “investment mode”, registering losses for the past few quarters. There were reports last year of Web18 looking at diluting 10-15% via an American Depository Receipt (ADR), and the word is that the company was valued then at around $1 billion. But with the global recession looming large, a listing would be on the back-burner. So then is Web18 offering ESOPS in order to retain employees?

We weren’t able to glean how much of Web18’s share capital has been allocated to employees, but we’re told that a very small percentage of the shareholding has been given as ESOPS, and mainly to senior employees. Please note that Web18 has declined to confirm or deny these developments.

In 2006, the company had raised $10 million from Tracer Capital. In October last year, Web18 exited its brokerage joint venture with Ambit Corporate Finance and the erstwhile Centurion Bank of Punjab.

Some ESOP success stories were covered at VentureWoods: OnMobile Global and Quasar Media

— Q1-09 Results: Web18 Reports $1.8 Million Loss; Revenues At $3.1 Million
— Web18 Q2 Losses Triple To Rs. 24.2 Crores In A Quest For The No.1 Spot

Disclosure: I own a few of shares of Network18 Fincap