Net entrepreneurs still haven?t given up hope of striking it rich in the virtual world, which continues to see specialised portal launches almost every day. But some industry experts are not sure if such portals will stay the course.

With less than 1% Internet penetration with 10 million connections, and the country constantly missing its Internet and broadband reach-out targets, the picture doesn?t seem very bright for online portals on matrimony, jobs, travel, real estate and the like.

Actually, some experts even warn that the current situation is not very different from the one that led to the dotcom bust early this decade. Despite that, new entrepreneurs are betting big on high Internet and broadband penetration in the hope that in the future, there would be enough netizens visiting such portals.

Take the case of matrimonial portals. There are over a 100 such sites but only a couple of them are visible, and most are still in the investment phase. Netting a nuptial knot may not be a very profitable business today, say industry insiders, but it has the potential to do well in the future. Hopeful that marriages will be increasingly arranged online in the coming years, Internet entrepreneurs want to try their hand at matchmaking.

As the cost of starting a portal is not very high, it is easy to launch a specialised website quickly. But the most difficult job is to keep these portals alive by attracting a respectable number of visitors, which most companies fail to do.

?Usually, top three players garner most of the share in almost every market. So, if new entrants have to survive, they should come up with offerings different from the existing ones. The business will be difficult to sustain unless they target niche segments to address visitors? issues,? says Sanjeev Bikhchandani, founder and CEO, Info Edge.

According to Internet and Online Association, the market size of online matrimonials is estimated to be Rs 80 crore in 2007-08, which is huge considering its meagre Rs 6-crore worth four years ago. Buoyed by this growth, many like jain4jain.com, govtshaadi.com, mangliks.com and bposhaadi.com are entering niche segments.

Vibhas Mehta, business head, Shaadi.com, points out that starting a portal is not a big deal. ?What is important is to turn it into a profitable business, which many of these portals that come and go each year fail to do.?

Experts say that an initial investment of up to Rs 30 lakh is all one needs to float in the virtual world, and if the marriage business doesn?t work, one can use it to sell something else. This makes sense. A survey conducted by Synovate for Microsoft Digital Advertising Solutions across 10 markets in Asia corroborated that portals are the second-most used resource on the Internet (55%), followed by search engines (44%) and product review websites (41%).

Despite promising macro numbers, marriage portals are struggling as they bring together individuals whose capacity to pay for the service is quite limited, especially in smaller towns where Internet is expected to grow the most.

Job portals, however, have fared relatively better since recruiters are ready to dole out a few extra bucks for using the online platform for headhunting. Experts say that broadly, matrimony is not related to growth of the economy unlike jobs and real estate. The Internet and Mobile Association of India estimates that the number of online job seekers has crossed 9.2 million in 2006-07, with the market size of the Indian online recruitment industry touching Rs 241 crore.

Matrimonial and job portals are growing at 50-100%. But real estate portals are the fastest growing at about 200%, although on a small base. Aided by advertising campaigns, portals like 99acres.com and magicbricks.com have significantly increased their visibility over the last few months. To cash in on the real estate boom, a host of other portals have also mushroomed, promising to serve as a one-stop platform for property buyers and sellers.

The online travel industry is the largest contributor to the B2C e-commerce industry, worth Rs 5,500 crore in 2006-07. It is expected to have risen to Rs 7,000 crore by the end of 2007-08 owing mainly to the entry of low-cost carriers. But, the biggest issue facing this industry is the limited penetration of credit cards, coupled with consumer apprehensions towards using plastic money online.

Most of the portals are focusing on youth since the young form a major chunk of the growing Internet user base in India. There has been an unexpected decrease in Internet use by older men and non-working women. This may be due to a lack of sticky applications for this segment and greater growth rates of other segments clouding growth in this market.

Many web portals, including MakeMyTrip of Deep Kalra, are also mulling listings to fund expansion. Currently, there are only three portal companies listed on different stock exchanges. Sify and Rediff are listed on the Nasdaq. Sify was the first Indian website and second Indian company to list on the US stock exchange during the dotcom boom. Rediff also got listed on Nasdaq soon after that. Bikhchandani-promoted Info Edge became the first Indian company to get listed on the BSE.

But low Internet penetration may spoil the party. The government missed its 2007 target of 18 million Internet and 9 million broadband connections. The number of Internet connections stood at 9.7 million at September-end. Despite the government calling 2007 as the ?year of broadband?, the number of broadband subscribers stood at 2.8 million by the end of December.

The Centre had also predicted that the number of Internet and broadband subscribers would increase to 40 million and 20 million, respectively, by 2010. But, considering the low PC penetration in India and the delay in the off-take of wireless broadband, it may miss the 2010 target as well.

Popularity of activities like online gaming and video downloads has helped increase the share of the entertainment segment. But, niche websites like matrimony, jobs, and news still have a long way to go as the content on these sites is largely limited to English. The user base of these sites is expected to increase once the content becomes available in other Indian languages, sums up IAMAI.

Bikhchandani, however, is hopeful that niche portals are a very attractive market and will do well, even if Internet penetration doesn?t grow at a fast pace. ?Even if the government?s target of 40 million Internet connections by 2010 is not met, we will be profitable. If it?s met, we will be highly profitable.? Besides, experts argue that the number of Internet users in India is far higher at 60-70 million than the number of total Internet connections in the country (about 10 million). And that is not a small user base to begin with.