BT Dot.com: 1st Anniversary : Overview

The end is near. For the last year or so, Indian dotcoms have embarked on an age of unreason. Intoxicated by the furious pace of innovations that weakly lapped up against our PCs, the dotcom scene has followed, been led, but never really set out on its own. Everything was transplanted: page-views and valuations, speed and scalability, branding and the first-mover advantage. If December, 1999, marked the high of Satyam Infoway's buyout of Indiaworld, a year later it's all very different, much starker. Thank the nasdaq for enforcing, for want of a better word, a correction.

The fallout will be painful, no doubt. Studies report that 95 per cent of the dotcoms in existence will not be there tomorrow. Such information is not traded in whispers; it shouts from the rooftops in keeping with the hype that took it there. Suddenly, websites aren't served up, or float in digital space, a constant reminder that is never updated. But that's not quite as harsh as another reality, glossed over in the flourishing industry for e-conferences and seminars: India is virtually disconnected from the digital economy. There are more people surfing in a clutch of major US cities than in an entire country. nasscom's prediction for 2001: 5 million internet users in India.

Clearly, the top priority is infrastructure. After throwing open internet services to the private sector, the government has allowed private ISPs to set up international gateways. Not only have some ambitious undersea cable projects been announced, over a dozen firms are laying the backbone infrastructure to wire up town and cities across the country. This should result in faster access at affordable prices; some of the benefits will be visible in the coming year. Then, the Holy Grail of connectivity rests in internet-via-cable, which became a reality this year, albeit in small pockets.

Access devices will be tested on consumers; in 2001, the internet-via-cable TV market will reveal itself, a crucial inflexion point. What is clear is that the future of the internet-broadband technologies that stream high-quality video images-will not explode in a hurry on Indian screens, apart from perhaps in small pockets. On the positive side, the issues of payment mechanisms and legal infrastructure have been looked at in the it Act, 2000, but more has to be done to inspire confidence.

THE TOP 10 TRENDS
1. Access Devices	6. Database Marketing
As net-via-cable comes of age, set-top boxes and cable modems will be marketed aggressively	Dotcoms will serve up unique profiles to feed the beginnings of differentiated advertising
2. Audio Internet	7. Horizontals
Web-based call-centres to deliver voice-support services and back-end technical maintenance	The race for the top two or three spots will intensify, with the winners increasing their lead
3. Bandwidth	8. ISPs
A smoother ride for surfers on the information superhighway, but not smooth enough-yet	With access prices crashing, a ruthless consolidation will take place among the smaller players
4. Bricks	9. M&A
Indian offline companies will start putting into effect their internet strategies	Customer acquisition and the search for scale will drive consolidation in the B2C and B2B spaces
5. Cybercafes	10.Vern Sites
This popular form of access will morph into retail chains and spawn internet kiosks	An increased tempo in the effort to open up new language markets, and meet the demand from NRIs

While the country's internet infrastructure issues will not get resolved in a year, the search for revenues will alter the landscape for dotcoms. There are spaces that exist for sites from India, that much is certain. Apart from a focused and well-to-do internet audience in the country, there's the NRI market to service. The most interesting battle in this space will be fought between the horizontal portals. With advertising revenues just a trickle, and e-commerce not picking up, cash-burn will separate the winners from the losers.

In the vertical space, it's a different story. There are some clear winners. The job sites market, for one, is alive and kicking; the entry of US major Monster should speed up consolidation. Similarly, another area where the net has made a tremendous impact is in travel, though, here again, there are too many sites servicing the industry. Both educational and medical websites have potential; but the marketplaces they are addressing are not well defined. In the case of education, the concept of distance learning will have to be digested. Online continuing education for business has the capability to be a winner. Finally, efforts towards establishing vernacular sites will grow the market, but back-end issues will stall spectacular results.

Which brings us to e-business. Studies indicate that 90 per cent of India's e-commerce will belong to B2B commerce. This is in sharp contrast to B2C commerce sites, which are not looking at sustainable revenues in the short-term. Dotcoms-as well as the corporate sector, which is itching to get a part of the action-have experimented with various business models, from public and private marketplaces, to consortia-promoted exchanges and enterprise solutions. It's not that easy to 'make' a marketplace; there are issues of mindset and technology. Besides, Indian companies are simply not used to being online. When they will be, then we can remove the 'e' from e-business. But then, that will only happen in the Age of Reason.