Everyone in the internet community was delighted by the valuation that Satyam gave Rajesh Jain's baby, and there's no doubt that he should be congratulated.

Jain will probably have truckloads of financiers and bankers wooing and chasing him, unlike in the past when it was he who was chasing them to get a proper valuation for this dream internet site. Word is that he has met almost every venture capitalist of note and rejected all their offers, using the previous VC's offer as a new benchmark for himself at every new meeting.

Rs 500 crore is probably a price he may have not even dreamed of. Other longer lasting consumer brands have been valued at much less. Nevertheless, questions that arise are: Why was he paid oodles of cash? Was it the community of regular visitors that Indiaworld has created? Was it the number of page views it generates? Or was it what it could become with some further fine tuning? Or was it the revenues expected per visitor of the site? Did Satyam want to leap frog in the access-content game and get its AOL model right? Especially in the light of the fact that fierce rivals such as Zee TV's Subhash Chandra and Vijay Jindal are seeking to launch ZeeNExt by next mid-next year. Or was it the idea that it was about time somebody set a bench mark for internet valuations in India? Or was it the old investment banker-client nexus, which led to the deal being struck? It probably was a bit of all of these.

Though, one must admit it is a windfall of sorts that every internet entrepreneur will be hoping to pocket. (One wag said that at that price Satyam could have bought not only the internet sites of India Today but the entire group, including its TV, print and audio wings.) On the other hand, Rediff.com has reportedly been valued at close to Rs 1,200 crore by an investment banker. It valuation/capitalisation will be more than a billion dollars post listing in the US stockmarkets. Or so the buzz goes.

pFrom Satyam's side it is buying loads of content quickly in the hope of converting some of the visitors to IndiaWorld into users of its internet dial-up access service. But it will have to take note: A huge chunk of the users of the IndiaWorld site are folks from overseas. For the merchant banker DSP Merill Lynch, it is a coup of sorts. It has been involved in a deal which will be considered a signpost when the history of the internet in India is written. Hence, it will be pursued by many other netpreneurs who will want it to replicate the superlative deal with them.

Finally, the three are also probably gambling that an AOL or any other huge international/American ISP will probably take the bait and make a bid for the remainder of IndiaWorld at a much higher price. (Under the deal Satyam is acquiring a 24.5 per cent stake for $28 million with an option to purchase the remainder before June 30, 2000 at an exercise price of $87 million. Satyam has placed a non-refundable deposit of $12 million with IndiaWorld for the option.)

This writer's belief is that the merchant banker, Jain and Satyam will work hard to find another investor to come in at that - or an even higher - price before the deadline. If that fails, then Satyam will pay up and wait. Until it can find an investor/investors willing to pay even more dollars/rupees for its internet access cum content service. After all it's a game of valuation on the internet. And you have to aim high. Satyam knows that pretty well.

(Feel free to e-mail with your comments to webmaster@indiantelevision.com or television @vsnl.com)