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Weekly Digest (19-23 Jan)

Date: 19th to 23rd January 2008
Segments: Editorial, Discussion, Stories, Events

We’re in the middle of the earnings season, and I can’t help but compare the investors earnings calls for this quarter with those I’ve listened to over the years. In the past, most calls have been focused on asking companies about where they are investing their money, how they are diversifying, and what they are doing in order to expand their consumer base. That is, how they are “maximising shareholder value” by scaling up their businesses. In some instances – particularly in case of the Internet businesses, one often felt that the analysts didn’t understand the business well enough, and some cases – neither did the top management that was addressing the questions on the call.

Many a media company hived off their Internet businesses, or announced plans for multiple TV channels, with an eye on an eventual listing on NASDAQ or AIM. Never mind the revenues: they felt that if they could put together a portfolio of properties and use search engine marketing to showcase a large user base, they could get a multi-million dollar valuation. If you weren’t scaling rapidly, you were going to miss the IPO bus.

The global downturn, the decline in advertising, and the fact that easy money is no longer available has spoilt many a dream. There are very few questions on earnings calls this quarter (I participated in 6 last week) about plans to scale. While companies are being asked about the market situation and how they plan to cut costs, I don’t think the company management is being asked enough questions on the state of past investments, or even being asked to justify some of those investments. Many analysts are accepting generic answers, and not seeking specifics. In the context of what Satyam did, it appears that the public and the analysts on the call have been convinced that it was a one-off case; that there was just one black sheep in the flock. So far, the skeletons (if any), remain in the closet.Our Earnings Coverage

Results: AirtelHT Media, Idea Cellular, Info EdgeRediff, Tata Teleservices, Mukta Arts, Compact Disc India Ltd
Earnings Call: HT Media


Two stories attracted significant attention this week, in terms of comments: a debate on Netcore’s comments sent to the TRAI on the VAS recommendations, and something of a face-off on this story on Zapak claiming to have achieved break-even (and Games2Win revenues)

NDTV Convergence Outsources Mobile Ad Sales To Affle
SWAN Telecom Under Investigation, Where’s The Transparency In Alottment Of Licenses?
Netcore’s Comments On TRAI Draft Recommendations
— Are Hindi News Channels Only Paying Lip Service To The Online Market?
Info Edge Launches FirstNaukri.com
— Exclusive Contests, Bad Idea
Batelco Picks Up 49% In STel
— TechTribe To Fold; Canaan May Sell
Matrimonial Services Find A Partner In Video
Airtel Launches IPTV
— mKhoj To Monetise Vuclip’s Mobile Traffic; Garner Clients For API

Go Mobile In 30 Days: 28th Jan (Mumbai) and 30th Jan (Delhi)

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