A few weeks ago, Info Edge CEO Hitesh Oberoi, just before the announcement of the companys financial results, said in an interview that Info Edge would be looking at acquisitions. Apart from the StudyPlaces misadventure with KPCB and Sherpalo Ventures, the company has looked at strategic investments, but not really at acquisitions, and made three other investments: eTechAces (PolicyBazaar), Zomato (previously FoodieBay) and Applect (MeritNation): the company initially said that it would primarily look at investing in online marketplaces and later expanded mandate to cover ‘online businesses’. “So consumer internet in India”, Info Edge Vice Chairman Sanjeev Bikhchandani reiterated on the conference call, is what the company is interested in, and within that “we are open to any sector.”
Makes me wonder – why not mobile? Despite launching SMS alert services, a WAP site and more recently, a BlackBerry app, Info Edge has not really tried to build any mobile specific business. They’re no longer the upstart they were in 2000, and don’t have a cash crunch. Given that the mobile data space in India is still in its infancy, why not take a punt on the mobile space? Info Edge clearly doesn’t have an affinity for the domain, but surely it can allocate some spends so that in case the mobile data space does take off, it doesn’t lose out.
If nothing else, deciding to put money on the segment will mean that the management will at least try and keep abreast of trends in mobile, and keep an eye out for opportunities. Rediff.com, for all of their troubles, has invested in two interesting businesses – Eterno Infotech and Tachyon, as well as rolling out a promising initiative in Rediffmail NG. Perhaps it’s time that Info Edge took a look around mobile as well. On the call, responding to our question, Oberoi did say that “As far as acquisition of mobile companies are concerned we are continuously looking but we have not found anything as yet, but we are open to the idea.” But we weren’t very convinced by that: that was a reaction to our question: mobile still remains an afterthought, it seemed.
Notes from Info Edge’s Conference Call
The company appears to be doing much better that it was last year. Typically Info Edge accounts its sales as deferred sales revenues, and that is up to Rs. 69 crores at the end of the quarter, up from Rs. 64 crore at the end of the last quarter.
Going Social & Mobile
The company believes that mobile and social are the way forward, and are exploring ways of making their business more social: “Shiksha already has a large social component”, and they’re trying to find ways of making Naukri.com more social, apart from exploring how to use existing social networks and the social graph to help companies hire.
Recruitment Solutions (includes Naukri.com, Naukri Gulf, Job Seeker Services, FirstNaukri, Quadrangle):
– Net Sales: Rs. 62 Crore, up from Rs. 59 crore
– Operating EBITDA: 30.2 crore, up from Rs. 27.3 crore
– The recruitment business which comprises of Naukri, Naukri Gulf, Quadrangle and the Job Seekers Services accounted for about 83% of operating topline in Q3 versus 85% in Q3 last year.
– The Naukri corporate sales business grew its top-line by about 32% this quarter.
– Naukri and Recruitment as a whole grew 24%
– The EBITDA margins in recruitment were 48.7% versus 43.7% in Q3 last year.
– Resumes: 24 million, up from 23 million last quarter
– Average resumes added daily: 10,000, down from 13,000 last quarter
– Average resumes modified daily: 70000, down from 75000 last quarter
– Number of unique paying customers: 21000 , down marginally from 21100 last quarter
All verticals apart from Recruitment:
– Net Sales grew by 47% to 13 crores this quarter
– EBITDA losses was 2.7 crores down from about Rs. 6 crores
Other verticals (Jeevansathi, 99Acres, AllcheckDeals)
– Net Sales: 13.1 crore, up from Rs. 12.2 crore
– Operating EBITDA: loss of Rs. 2.7 crore, down from Rs. 5.9 crore
– Number of profiles ever loaded: 4.1 million, up from 3.9 million
– Average number of profiles acquired daily: 1750, down from 1860 last quarter
– Number of unique paid customers: 22495, down from 23660 last quarter
– Average amount realized in Rupees: Rs. 2375, up from Rs. 2309
– The EBITDA loss in Jeevansathi was Rs. 30 lakh, down from about 3 crores in the previous quarter.
– Jeevansathi business grew by about 16%, in terms of net sales.
On the call, Oberoi said that the company has been working on is a strategy which will
allow them to get profiles cheaper, “That’s how the business is going to sustain in the long run.” They’ve been trying out new marketing techniques.
– Number of listings (approx): 196,000 as compared to 177,000
– Number of Paid transactions: 5100 compared to 4900 last quarter
– 99acres is almost breaking even, reported a loss of Rs. 40 lakh
– 99acres business grew by about 74% in terms of net sales.
– Product and site improvements continue, A new “Ask and Answer” section was launched on 99acres
– 120 people doing sales at 99Acres
To our question about whether the growth in 99 Acres is sustainable, and whether the market is overheating, Oberoi said that “projects are still being rolled out across cities but if interest rates go up will sale slow down. It’s very difficult to say right now […]we still have a very small share of the advertising pie in the real estate sector. So we’re just doing about 6 crores or close to that number every quarter which is nothing as compared to what these guys are spending on print and television, and some of the other areas they advertise. So we’re hoping that even if the real estate slows down a little bit we will continue to grow[…] we are not seeing that much competition in the real estate.”
3.8 million profiles, compared with 3.6 million last quarter. 2500 profiles added daily.
– Shiksha grew by about 169% in terms of net sales, year on year albeit on a small base. The growth is 132% in nine months.
“That business is growing but it’s still small. So we are putting in on business model, we are trying various things and hopeful will get something right over the next few months and few quarters. But our impression of the online education space is that there are many-many companies trying many-many different things many times, couple of times same things also. So it’s a crowded space and thus far most companies are very small, nobody has cracked the best business model yet barring one or two exceptions. So the e-learning space is yet to be figured out by most of players. So in one line there is huge potential yet to be realized.”
Brijj is being revamped, and the company says it is going to “try a new approach.”