Hyderabad based Northgate Technologies Ltd is in significant cost-cutting mode: the company, which also owns the social networking site Bharatstudent.com and Online Advertising network Axill, has now announced the shutting down of two of the offices of its IPTV and VoIP subsidiary Globe7 – Beijing (China) and its subsidiaries sales and marketing office situated at San Francisco (USA). This announcement comes barely a fortnight after Northgate announced the shutting down of its Singapore branch, and wrote off fixed assets worth Rs 20.8 million.
We’ve been tracking Northgate for a while now, and from what we’ve gathered – their business largely been dependent on their Advertising vertical – Axill. The diversification into allied businesses like Social Networking and IPTV has been a means of creating inventory for Axill. For example, Globe7 recently partnered with SingTel in Singapore to deliver free content – live TV channels, news updates, movies, games and radio content to SingTel’s Wireless@SG users.
It looks like Northgate’s expansion plans are on now hold, expenses being curtailed. The challenge for the company is perhaps reflected in a 21.64% quarter on quarter decline in revenue, 44% decline in net profit and 95.05% increase in Selling and Marketing expenses.
That said – aren’t everybody’s plans of world domination on hold?
A Northgate Timeline: