Update: A Microsoft representative had declined to comment on the developments.

Earlier today: A fresh agreement is being signed between NDTV Ltd and NDTV Media Ltd, a company headed by advertising and marketing veteran Raj Nayak. Nayak and his team will set up a new venture called AIDEM Ventures. Mint had reported Nayak’s potential exit yesterday, and we’ve heard rumors of the same for a while now. Set up in November 2002, NDTV Media is the sales house in India for media companies including, according to its website, NDTV, Sahara One, Filmy, UFO Digital Cinema, Firangi, among others. On the digital front, they are responsible for sales in India for Facebook, Microsoft Advertising, MSN, MSN Video, MSN Mobile, as well as Bollywood Hungama, EquityMaster.com, among others, though not for NDTV Convergence.

All sales on MSN were routed through NDTV Media; we’re not sure of how the NDTV Media-MSN deal is going to play out, and whether a new deal will also be inked between AIDEM and MSN. At the time of filing this report, we’re yet to receive a response to text messages and calls to Nayak, as well as Neville Taraporewala, Director, India Advertiser & Publisher Solutions Group, Microsoft.

As of 31st March 2009, NDTV Ltd held 74 percent stake in NDTV Media, and on January 31st 2004, NDTV Media Limited had allotted 150,000 equity shares of Rs. 10 each to the Nayak as ‘Sweat Equity’. In 2005, the company had also constituted an Employee Stock Option Plan. In a statement, NDTV has said that as per the new terms of agreement, NDTV will save substantially on costs, having renegotiated the terms of engagement, and “will have greater control of its sales operations.”

NDTV Media Lost Money In 2008-09

Details of how NDTV Media has fared in 2009-10 are not known, but according to NDTV’s 2008-09 Annual Report, a sluggish economy meant that sales were under pressure during 2008-09. As advertising revenues for NDTV Ltd decreased, so did commissions paid to NDTV Media.

Additionally, NDTV renegotiated business arrangements with NDTV Media, because of which commissions to NDTV Media Ltd reduced to Rs 244.77 million, as opposed to Rs 377.58 million had the earlier arrangements continued. Thus, commissions from NDTV Ltd declined 46.2 percent from Rs. 455.21 million in 2007-08. NDTV Media made losses with a negative PAT of Rs 54.05 million in 2008-09, despite a marginal decline in turnover.

For more info on NDTV Media, download:

NDTV Ltd Annual Report 2008-09 (pdf)
NDTV Ltd Annual Report 2007-08 (pdf)