Despite reporting a loss of $2.3 million for the quarter ending 30th June 2011 (Q1-FY12), Rediff.com intends to increase its spends over the next $2-$2.5M per quarter for the next few quarters, to increase the footprint of its new services – namely, its daily deals business Rediff Deal Ho Jaye!, it’s local television advertising business Vubites, and paid mobile email service Rediffmail NG.
What is particularly worrying, is that the company reported an increase in India online revenues, which was significantly disproportionate to the increase in pageviews. On the conference call, Rediff Chairman and CEO Ajit Balakrishnan said that the company reported a 40% increase in pageviews, which led to an increase in costs, but as is evident from the chart above, India online revenues grew only 5.74%.
On the call, Balakrishnan said that advertising revenues grew 6%, and though Rediff’s ad rates have remained constant, due to challenging conditions with certain sectors in the Indian economy, the company had unsold inventory. He added that “Critical sectors like Financial Services, Insurance and Telecom, which typically account for a third of our revenue, have faced difficult times, and this is an industry-wide issue.” The company said in a statement that it saw declines in sequential top-line performance this quarter. We’ll have more from the conference call later.
– Cash Balance: Rediff’s cash balance declined to $35.9 million, as of June 30, 2011.
– Rediff Deal Ho Jaye!: has a presence in 41 cities, offers consumers 30% to 70% discounts across over 72 service categories. Gearing to provide next day delivery of coupons in all towns through strategic tie-ups.
– Vubites (Rediff Local TV ad network): has tied up with two channels and a distribution network of nine cable operators covering six cities: Bombay, Pune, Ahmedabad, Baroda, Surat and Bangalore, and has plans to extend to 15 cities. They are currently live in two cities – Bombay and Pune.
Note to Rediff: perhaps you should mail your earnings press release *before* the conference call, like most other companies do, instead of mailing it after the call. It’s happened so often, appears to be by design.