During the Rediff.com earnings conference call, CEO Ajit Balakrishnan said that the sequential quarterly growth has largely been driven by a growth in India Online revenues, though revenues from US operations have marginally declined. Rediff.com claims registered user base of 80.4 million at the end of the quarter, representing a 15% growth year on year. Cash and cash equivalents stood at approximately 46.8 million at the quarters end. Gross Margins for the company were 71%, down from 80 % last year.

India Online Advertising Trends

Performance driven advertising remained flat on a quarter on quarter basis, but Display advertising did well for the company: Banking and Financial and the Insurance segment remained top advertiser segments for Rediff, followed by IT Products, PC makers Dell and HP.

Balakrishnan said that though the environment has been challenging for their advertisers, the company has not seen any change in overall eCPM pricing rate. Advertising from credit card, home loans, personal loans and online brokerage continues to be subdued, and it’s too early to say when advertising will recover.

Revenue from top 10 advertiser comprises of 34% of Indian advertising revenue, as compared to 45% for the same quarter last year.

We spoke to Balakrishnan about the financial implications of the redesign, whether they are planning to change advertising rates, and sought usage trends given that the company had previously redesigned their India Abroad website:

What is the contribution of the Rediff.com homepage to revenues: how much of a revenue hit we can expect with no ads on the homepage?

We cannot spell out the contribution of the homepage, for competitive reasons. But we have experimented with our international site for about 3 months. Based on that, it will be a high single digit percentage reduction at best. It’s hard to predict, but our experience  in the US has been around that much.

Are you planning to change advertising rates, in order to help revenues to recover?

All media companies would dearly love to increase the rates as soon as possible, but I think…it’s hard to tell, but we do offer in our new layout, excellent sizes and positions. Our advertisers like it because people are spending more time on individual article pages, and more time spent should result in greater value for our advertisers, particularly display advertisers who are looking to establish a brand message. Whether it will translate to higher prices depends on not just our own merit, but also on what the competitive action is going to be in retaliation to that. We believe that right now, our current advertising positions and the way they are placed, and the size of ads we have, offer much much value to advertisers than before.

We’ve come across a significant number of middle and senior management moves from Rediff in the last 12 months, including VP Marketing Preeti Desai and SVP (Interactive Services) Uday Sodhi. Who’s come on board to bridge that gap?

All these individuals and more who have moved are characterised by the fact that they are well trained here, and they would have great value outside. We’ve not made any major replacement for any of those. We’re fine. So far as the structure is concerned, the key team has been around here for 10 years.

Any stats or numbers for the India Abroad site? The new site offers limited access to content…

Our experience has been that content is one part of the game – Internet companies dont live on content. Content is important, but it accounts for 20-30 percent of what we do. What is more important is what you do about content – most content is commodity. By making social actions possible around content, the new site – probably better than almost anybody else in the world – there are more social features and actions around content. Normally, PTI and Reuters accounts for 80 percent of content. What do you do with it? You can have message boards, save the content, look to see who else has saved the same content, giving you access to more content through the people network. Our message boards are infinitely more active than NYT, LA Times etc. We can’t put a number on the increase in usage on the International site, because Comscore numbers aren’t out on it yet.

(Updates: corrected user base from 18.4 million to 80.4 million. Thanks Rajesh)

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