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Under attack from more focused competitors, the first Indian classifieds e-biz venture is trying to redefine its raison d' etre.

By Hasnain Zaheer

Here's a new aphorism: being first on the Net doesn't always guarantee the right to occupy a throne in Webdom. Our protagonist, Purushottam Bhageria, the CEO of Millennium Infocom Technologies' mitclassifieds.com, has made all the right moves. An MBA from Cornell University (US), Bhageria was the first to think of, and implement, an on-line classifieds site catering to the Indian audience. Mitclassifieds began life a year ago. Today, Bhageria is fighting a grim battle in the highly-competitive classifieds market.

Wait a nano-second. It's not that he has gone wrong somewhere. Classifieds on the Net do work: they give surfers the ability to search and to drill down to their requirement. Says Bhageria, 38: ''I strongly feel that on-line classified advertisements targeted at Indian audiences are very useful.'' Adds Puneet Dalmia, 27, CEO, Webneuron, which has developed Zipahead.com, the site that advertises jobs: ''The print medium does not lend itself to an efficient search whereas, in the case of classifieds on an electronic medium, a user can quickly zoom into minute details.'' True. It is not easy to search the print medium as classifieds can only be listed in broad categories, like jobs, matrimonials. There is only one level of further segmentation.

It is not surprising, then, that, in the US, 30 per cent of the classifieds advertising has shifted to the Net. Global sites like Mountaintimes.com and Theglobaland mail.com compete with extensive classified content in portals like Yahoo! and Excite. There is a general consensus on classifieds on the Net being a profitable proposition, but with a caveat: it would require considerable investment in time and brand-building to generate profits in the long run. After all, any classifieds site needs to achieve a critical mass in traffic and postings to attract revenues.

And how does mitclassifieds.com-which charges no fee to register, as well as no fee to post classifieds-score on that front? So far, 15,000 advertisements have been posted under different categories, from jobs to property to merchandise, on the site, which gets between 1,500 and 2,000 queries per day. The 20,000 page views per day is just not good enough given that a user-base of 2 million users is too narrow for most sites to build traffic to attract revenues.

Bhageria, clearly, needs to build up traffic to the site to serve them up to banner advertising. Companies like MRF, LG Electronics, and Hercules Cycles are attracted by the ability to home in on mitclassifieds. com customers' mailboxes-where the responses to a classified are directed. However, only if it builds up volumes can MIT classifieds.com charge consumers for a classifieds listing. And justify its role as an infomediary as it charges Rs 100 for a posting coming through a brick-and-mortar distributor. Says Dalmia of zipahead.com: ''It might face a typical chicken-and-egg situation, where traffic is dependent on the number and range of classifieds posted.''

Of course, the low level of Net access has a major role to play in keeping volumes down. Bhageria's solution is quintessential brick-and-mortar. Millennium Infocom has appointed 15 distributors to gather advertisements for the site-where consumers will pay a fee. In the next 3 months, he expects to put 40-50 distributors on the rolls. In all, the site hopes to close 2000 with revenues of Rs 50 lakh from advertising, and classifieds revenues from off-line users. Its parent's bread and butter is Website development, from where it will garner revenues of Rs 2 crore in 2000.

But the 45 people on Millennium Infocom's rolls realise that linking up with distributors is just not enough to attract traffic to the site. Particularly in the face of stiff competition from horizontal classifieds portals, like Timesclassifieds. com, which leans heavily on the print classifieds in The Times Of India. Says Rajesh Sawhney, 33, Deputy General Manager, Times Interactive: ''Our click-and-mortar approach ensures that content is paid for and, therefore, is valid, and not frivolous.''

Mitclassifieds.com also faces competition from sites operating in vertical domains. For instance, a user might prefer to log in to naukri.com for job listings, indiaedu.com for educational institutions, jeevan sathi.com for matrimonials, and so on. These sites provide specialised information and listings on a domain. Adds Dalmia: ''Although it cannot be treated as a thumb-rule, customers tend to remember sites catering to specific domains and specialists.'' Of course, grand successes like eBay and e-lance do provide services across verticals.

Still, Millennium Infocom is not taking any chances. The company plans to link 5 vertical portals, including one on personal finance, to mitclassifieds.com. Says Ashish Nagrath, 35, Senior Vice-President, Millennium Infocom: ''This is in line with the shift in focus from general interest portals to vertical portals, which can drive business to the site and make it a commercially-viable model.'' Millennium Infocom has been steadily increasing non-classifieds content to attract users. In December, 1999, it added sections on news, career counselling, chat, general aptitude tests, a free homepage, quizzes, jokes, entertainment, and e-greetings.

Clearly, Millennium Infocom feels that the site should not rely on classifieds alone for traffic. Makes sense. Major portals like Yahoo! and Excite have classifieds sections, but are, of course, known better for their non-classifieds content. Mitclassifieds.com would, thus, become a horizontal portal, with content other than classifieds, as well as links to a clutch of vertical portals. Yes, Bhageria would no longer enjoy the first-mover advantage in these areas. He counters: ''One need not go to entirely unchartered territories. There are several niches and corners still available which offer opportunities.''

Funds are not a problem, avers Bhageria, whose family controls Philatex, a Rs 200-crore textiles and real-estate group. Bhageria draws heavily on the Web-development side of the business. For instance, it is developing an exchange-and-barter Website for a US-based client. Per se, the site operates on a straightforward technical platform: it is designed in HTML, PHP, and Javascript, with MySQL as the database at the back-end. It runs on a Linux system, and is hosted on a dedicated server in a data-centre in the US.

Realising that classifieds on the Net can only intensify in the Indian market, Millennium Infocom has plans to package its classifieds implementation as a product, and sell it to other Website-owners. Customers can either purchase the software, or get it implemented by Millennium Infocom. Another product at an advanced stage of development is a Web-based e-mail service. Shiv Kulhari, 32, Vice-President (Website Development), says: ''We put special attention to design and navigation to give users a superior experience when they are surfing.''

Our protagonist seems to be on the right track in developing related content for the site, creating a physical channel for off-line users, and, as the classifieds business matures in the long term, keeping channels of revenue open through Website development. Over the next 3 years, the site has to generate traffic, traffic, and more traffic. Only then could it, perhaps, reach the stated revenue model: a hefty valuation of the Mitclassifieds brand.

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