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Weekly Digest (27-30 Jan): Earnings

Date: 27th to 30th January 2008
Segments: Editorial, Earnings, Discussion, Stories, Events

After many a silent month, the buzz last week was all around TV18s Internet and Mobile company Web18: we learned that the company handed out ESOPS, registered for an IPO at NASDAQ, and then there was word that their CTO Varun Singh is leaving the company. Web18 has been on something of a spree for the last two years now – they’ve launched several portals like Buzz18, Tech2, Biztech2, Indiwo, Josh18 and more, after acquiring CricketNext, CompareIndia, Urban Eye (Rishi Khiani, founder of Urban Eye is the COO at Web18). The Network18 group has also made other Internet investments like Yatra (Travel), Big Tree Entertainment (BookMyShow) and Tangerine Digital.

Their biggest bet, however, has been In.com, with the domain name acquired for a significantly large amount, and going by the way Web18s costs have piled up over the last 3 quarters – built, marketed and probably maintained at significant cost too. Consequently, Web18 can now claim that In.com is the second largest Indian portal according to comscore, and is challenging Rediff for the number 1 spot. But there are two things to consider here – firstly, how much of that traffic goes to In.com, and how much of it goes to IBNLive.in.com, Cricketnext.in.com, Tech2.in.com, Josh18.in.com, and the rest of the brands hosted on In.com?

This is significant when it comes to ad sales – if Web18 claims that In.com is number 2 or number 1, and it needs to disclose that IBNLive, CricketNext and Tech2 are a part of this. Else, this claim will amount to, what is referred to in accounting terminology as, Double Counting, albeit of traffic. Secondly, from an investment point of view, one also needs to keep in mind profitability – how much of In.com’s traffic is organic and how much is dependent on advertising spends – on Search Engine Marketing? Is there repeat usage, or is it search engine marketing arbitrage – where you spend to acquire an audience, sell the usage to advertisers and pocket the difference? In this context, the launch of Email and the money spent on licensing music for the portal are investments in ensuring repeat usage.

Do take our poll on Web18’s impending IPO, and perhaps tell us what you think of the company’s ascent, its investments, and potential here.

(A disclosure: I own a small number of shares of Network18, of which Web18 is a part)

Earnings Results:

SifyRCOMNDTVWeb18OnMobile GlobalIOL NetcomIBN18, Zee News, ZEELCyberMediaUTVNorthgate

Discussion: The discussion continues at MediaNama on Zapak’s revenues, though the focus has clearly been on Games2Win for the past week.


— Interview With Ajit Balakrishnan: Rediff Increases Stake In Tachyon To 26%
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Ronnie Screwvala’s Email To UTV Employees on Challenges in 2009
Times Internet (Indiatimes) Launches Active Search; The Israeli Angle
— France Telecom Gets Approval For ISP License In India
— Hell Hath No Fury…
— GlamMedia Acquires Indian Co Adaptive Ads
— HindustanTimes.com Launches Blogs
— Telecom Round Up: Telenor-Unitech Funds, SEBI DoCoMo-TTML, Swan Rollout

Converging World, Kolkata

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