This was kind of “shocking” to me. With Alexa rating of around 500 and Indian rating in top 50 how can a website can’t generate enough money to survive on its own?
Last week Northgate technologies informed that it will be selling off two of its major commodities (bharatstudent and ziddu). Northgate registered a net loss of Rs. 170 Million in last quarter as against a profit of Rs. 225 Million for the same quarter last year.
This brings us to the same clichÃ©d question – What would happen to tens of social networking websites having both traffic and unique visitors but no real revenue model?
It’s apparent that these websites (Indian copies of Orkut and Facebook) relied on the fact that traffic is the only thing required to run any website, money will follow!
But they forgot the fact that Orkut is backed by Google and Facebook has 300 million users worldwide as against a mere 1-2 million (Indian) users which these Indian Social networks boast of !
Moreover, this a fact that real internet buyers still exist in far west, and targeting an India centric social network and hoping that they would buy your ads later is a real waste of time.
The sad story about Rediff reflects the same – It’s more than 10 years in operation for NASDAQ listed Rediff and it can hardly make any money. It’s a joke that Rediff has achieved an enterprise value of $42 million in 2009- Read this great post to understand more.
Coming back to bharatstudent’s story, there are other social networks (professional networks, Indian social networks, etc etc) who have failed- minglebox.com, techtribe.com, apnacircle.com (surely would have been busted much earlier if Sabeer Bhatia wasn’t a millionaire) etc.
Believe it or not, big media houses just haven’t got a hand of Indian Internet scenario as yet – When it comes to product development they say that Indian market is different from US and hence they are creating an India centric product, but when it comes to generating money they tend to believe that consumers across the world pay similarly.
What a joke !
Would be interesting to know your views on this…
[This Media Monday digest has been written by Rabi Gupta, a start up enthusiast and co-founder of iDubba (Intelligent Box).]