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HT-Velti JV To Launch First Mobile Campaign In A Month; FY-09 Internet Revenues Clarification

Following the HT Media FY-09 results last week, we contacted their Investor Relations team regarding their Internet revenues. A couple of quarters ago, on an earnings conference call, the HT Management had said that the Internet revenues for HindstanTimes.com were at Rs. 70 lakhs per month and Livemint.com were Rs. 35-40 Lakhs per month. However, in its Annual results, HT Media has reported Internet revenues of only Rs. 99 lakhs for the year.

FY-09 Internet Revenues Do Not Include Hindustantimes.com, Livemint.com

The investor relations team told us that the Internet segment results only reflect revenues of Shine.com; “there is no significant change in revenues for LiveMint and HindustanTimes.com. They’re still clocking approximately the same run rate.” The money being invested in Shine is being invested in the ongoing recurring expenses and promotions. Shine was launched in June and so far, “it is doing 75-80% of what the planned revenues were.”

On The Mobile Marketing Joint Venture With Velti

The mobile marketing joint venture between HT Media and Velti Inc has been busy tying up with different mobile service providers for launching campaigns, and there have been delays in the tie-ups. In another month or so, the first campaign from the HT-Velti JV should be live. The JV will offer services related to mobile marketing and advertising – from conceptualizing the campaign to providing the platform for execution, with reporting and analytics. The investment in the JV is small, according to the HT Media IR team: Velti is providing the technology, while HT will provide the reach to the advertisers in India. The HT Media sales force will sell mobile advertising as well.

How The Partnership for Growth Model Is Accounted

“If there is a client who wants to enter into a 3 year long arrangement for Rs. 3 crores. On day 1, the investment worth of 3 crores is in equity or property. In the balance sheet, the investment of Rs. 3 crores and the liability is recognized as advance against advertising, with no impact on P&L. As and when the client starts utilizing the inventory, you recognize the revenue, and debit the liability. The valuation isn’t mark-to-market; the company assesses the value of the investment, based on when they think of exiting the investment. These are long term investments. The company does a year end exercise as a valuation. The value of the portfolio should neutralize. There is a provision being created – if there is a loss, it will be charged against that provision. The loss will happen only when the equity is monetized. This equity comes at a marginal cost because at any given point in time, you would have excess inventory which can be utilized.

Related:

— HT Media Q409 Call: Mint To Launch In Kolkata, Chennai; Internet Forecast – Rs. 35 Cr Loss
— Q409: HT Media Reports Rs 234.3M Profit; Internet Loss; Consolidates Digital Ops Under HT Digital

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