India's Hottest Website, Rediff.com, Eyes Listing in the U.S.
By Eric Bellman
Nandu:
Remember you heard it here first.
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India's Hottest Website, Rediff.com, Eyes Listing in the U.S.
Mumbai, May 19 (Bloomberg) -- About one million Indians tap into Rediff.com each month, rummaging for everything from the hottest new Hindi movie soundtrack, the latest on the political horse-trading in New Delhi to a hot new recipe for the spiciest chicken masala yet.
As India's biggest website -- the Yahoo!, Amazon.com and America Online all rolled into one for the Indian user -- draws more visitors who shop for music and books and even look for a mate, Rediff.com is looking for ways to cash in.
''We may be ready later next year to do a simultaneous listing on the Nasdaq and the Indian markets,'' Chairman Ajit Balakrishnan said in an interview. ''The Indian user base is growing dramatically,'' and 45 percent of Indians on line visit the site created three years ago, he said.
Investor interest is already gathering steam for Rediff, which counts Intel Corp. and New York-based venture fund Warburg Pincus & Co. among its shareholders, and like many websites is still at least three years away from making money.
''We'd be interested,'' if the price is right, said Simon Holdsworth, who helps manage more than 500 million rupees ($12 million) as the managing director of ITC Threadneedle AMC Ltd. in Mumbai.
Rediff will join the growing swell of companies in Asia looking to capitalize on the Internet mania in the stock market, including Travel.com.au, a travel site in Australia and Pacific Internet Ltd., a Singapore Internet service provider. The companies have good stories to tell, with demand for services, entertainment and communications on the Internet soaring as the world's most populous region gets wired.
Internet Boom
The number of Internet users in Asia outside of Japan will expand 35 percent a year until 2003 to reach 57.5 million customers, market researcher International Data Corp. or IDC said. IDC estimates that the Internet commerce market in Asia excluding Japan will climb to $32.6 billion by 2003 from $724 million last year.
Among the region's markets, Australia is the biggest with $432 million in Internet commerce transactions last year, said Richard Jacobson, an IDC analyst in Kuala Lumpur. IDC predicts that China and India will lead the market in 2003 with the number of Internet users.
Granted, with only two phone lines for every 100 people and only one Internet user for every 950 in the country of about a billion people, India is still only a tiny part of the World Wide Web.
What's more, ''computer penetration in a lot of Asian countries is relatively low and in some markets, the Internet industry has been quite protected,'' said David Leow, associate director at HSBC Securities (Singapore) Pte.
Rediff's Story
Still, investors are willing to bet that profits for the likes of Rediff may not too far away. With more than 80 million hits a month and growing revenue from advertising and on-line product sales, investors say would like to buy a piece of Rediff's potential.
The vote of confidence from Intel, the world's biggest computer microprocessor maker, and Warburg Pincus, which own as much as 39 percent of Rediff, is also likely to help.
Rediff said that while the number of Internet users is still low in India, it's expected to increase five-fold to five million in the next two years. Also, more than half of Rediff's users are expatriate Indians who are more likely to plug into the Net.
Rediff said it will continue to get more than 40 percent of the Indians on the web to visit its site by giving them information, products and services they want.
That means Rediff's sports pages and chat rooms highlight the World Cup of cricket, not soccer. It means payment for cassette tapes or movie tickets ordered on line are made to the postman, and not by credit cards. And it means that if someone finds the right Hindu partner through personal ads on the site they can ask the on-line astrologer to choose an auspicious day for a wedding.
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