eFE INTERVIEW -- Nitin Gupta, COO, Rediff.com

Rediff says it’s early days for broadband

Rediff.com has announced an increase of 5.7 times the revenues for the quarter ended June 20, 2001, as compared to the same quarter last year and the company’s net loss, on the other hand, has risen to $3.28 million. The portal is also faced with serious competition from the latest contender on the block — Star which has recently acquired Indya.com. In an interview with Priya Srinivasan, Mr Nitin Gupta, COO, Rediff.com, explains the company’s business strategy and dwells on how the company views the latest competitor

While operating losses for Rediff this quarter indicate a decrease, the net loss shows a substantial rise compared to the same quarter last year. How do you plan to address this?
The operating loss describes ongoing operations while the bottomline also includes one time recurring charges. This quarter we had two such charges - an integration cost arising out of our acquisitions and a legal cost where we have to bear the first $250,000 after which insurance will take care of the rest.

What is your cash position and cash burn at this point?
Our cash position stands at $32 million and the cash burn right now is $2 million per quarter. If the latter does not rise and we sustain our pace of growth we should meet market expectations of break-even by the end of the current fiscal.

How much of the $32 million has been earmarked for acquisitions? What sort of acquisitions are you looking at at this point?
I cannot spell out the acquisition budget but we are constantly looking for acquisitions which tie in with our new business focus. We are evaluating deals all the time but the acquisitions will be at valuations which make sense.

Your last two acquisitions - Value Communications and India Abroad — have added substantially to your bottomline this quarter. Value Comm has contributed $4.2 million and India Abroad $1.34 million to your total of $5.7 million. Is it your intent to acquire companies which help the bottomline at this point?
No, that is not the key intent at all. We are basically looking at acquisitions which will help us get a combination of online and offline presence. While in the short term, media services and communications services like India Abroad and Value Comm may be important, our long-term revenue earners will definitely be subscriptions and e-commerce which we are working towards.

One of your competitors has been acquired by a media powerhouse — STAR TV. How do you plan to face the competition especially in the light of broadband capabilities that this new entity brings?
We are cautious and watchful of all competition but we don’t feel threatened by this new entity immediately. True convergence will take a while to happen and we have our own plans to deal with that. In any case as far as broadband is concerned, its still early days. It’s still a while away the world over. While we do acknowledge the marketing power that the Star-Indya deal brings to the table, Rediff has a first mover advantage and a registered user base of 8 million which is difficult to counter. But frankly, I’m glad that a player like STAR is paying serious attention to this market.