Recovery in the advertising market helped Rediff.com, as the company reported a 39% improvement in advertising revenues, and better utilization and delivery of inventory. Total India revenues, which include fee-based and online advertising revenues, grew 31.4% for the quarter, contributed to a 24.74% increase in total revenues. However, the increase in revenues didn’t translate into a reduction in losses: net loss was up 9.76% year on year at $1.8 million, and Operating EBITDA declined 52.11% to a loss of $1.72 million. The company says,  quoting Comscore, that its India active user base grew 38% year on year, higher than the market growth.

Press Release | Q2-FY11 | Earnings Call: Today, 6:30 OM

During the quarter, the company spent $3.37 million buying Vubites.com from Rediff.com Chairman Ajit Balakrishnan, and the results include its performance. We didn’t quite agree with Rediff’s acquisition of Vubites. Rediff cash balance is down to $39 million, including interest accrued. According to Rediff, it will continue to invest $1.0 – $1.5 million per quarter through this fiscal year in product development and brand building.

Related:
Rediff.com Shareholders Approve $3.37 Million Vubites Acquisition
Ajit Balakrishnan: Rediff Buying Vubites Reduces Conflict Of Interest; Product, Target Market, Test Details
Rediff Board Approves Risky Buy Of Ajit Balakrishnan Founded VuBites; Our Take