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A Sullen Scrip & Sundry Suitors
The last man standing is finding it increasingly tough to keep his poise. Rediff CEO Ajit Balakrishnan, the posterboy of 'pure-play' nirvana, is now fighting the seventh class action suit filed against his portal's IPO- all in a span of under five months. The latest suit, filed against major Wall Street underwriters, for conspiring to defraud investors, also names Rediff.com among the defendants who issued IPO securities.
But this time round, Balakrishnan is in august company. Among the other corporate issuers named as defendants are Red Hat, Stamps.com, VA Linux Systems, Priceline.com, and MP3.com. And the underwriter defendants include Credit Suisse First Boston Corp, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter, and Salomon Smith Barney. The US version of India's public interest litigations, class action suits seek the accused to recompense the complainants if found guilty. The complaint alleges that the defendants violated federal securities laws by issuing and selling securities pursuant to the IPO without disclosing that the underwriter defendants in the offering had solicited and received excessive and undisclosed commissions from certain investors. High Fidelity Online Loyalty programs are messy in the real world, but easy online. May the soul of the seer who said the Net is all about the death of intermediaries rest in peace. That said, reincarnation is the prevalent trend. Piggybacking on the e-CRM wave, a clutch of companies is seeking to manage the online loyalty programs of other companies.
As a concept, loyalty clubs are quite old, but the Internet has overtaken the traditional media as the perfect vehicle for relationship management, thanks to the low-cost involved. Typically, loyalty programmes fall under the open user category or the closed user category. In the former, the surfer gets rewarded with points for his hours online or for activities like answering surveys. These points can be exchanged online or offline for any of the company's affiliate products or services. Says Kunal Mohiuddin, Co-founder, Netcarrots: ''This model is fast fading because the margins are very low.'' Players like Netcarrots are into the closed user thing, which is essentially an online adaptation of the rewards-against-performance model customised to work for a company's employees or suppliers. Another player in the space for online customer loyalty programs is Brandquiver.com. ''A lot of traditional companies are moving towards online loyalty programmes. Its essentially the law of economics that is operating'' says Rajesh Menon, Business Head (Marketing), Brandquiver.com. -Aparna Ramalingam Tied To The Mouse, Down In The Depths Staying afloat is the primary concern of the group that led the light in the days of the dot bull run, the e-consultants. When in doubt, give advice
Estimates vary, but as late as a year ago, there were around 1,000 e-consulting firms in India, most of them operating as four-to-five people outfits. ''Today, there are perhaps less than 600 of them, with dwindling margins and poor growth in business,'' says Sanjiv Agrawal, Partner, Ernst & Young India. The survivors were those who offered the technological strategic inputs like building the back-end and drawing up the business plan. Says Sanjay Jain, 36, Senior Vice-President (e-Building), Intiqua: ''Only the heavy duty players have survived.'' Intiqua wasted no time in being one. Originally the New Delhi-based NetAcross, a then dominant player in the Internet technology consultancy space, the company merged with Mumbai-based Online Solutions in April last year, and merged again with Singapore-based Exchange 21 in April 2001 to become Intiqua. This, according to Jain, was meant to gain size and establish a beachhead in the Asia-Pacific region. Moving out of dotcomscape is also an option. For example, consulting tycoon MindTree has reduced its exposure to dotcoms by about 20 per cent. Says Jain: ''Now we pick only those dotcoms which have strong basics.'' Another example is Planetasia, whose portfolio is now heavily tilted to the click-and-mortar space. Says M. Ravindra, Chief (Private Equity Investment), ICICI Venture: ''We have investments in Planetasia and feel that the company has made the right strategic shift in moving its focus away from the dotcoms to the enterprisewide e-business segment.'' Surfing around and investing more in marketing is another favoured option. And that's a preferred strategy for players with deep pockets. As against an earlier scenario when there was little pressure to aggressively court customers, there is now a realisation that the business will not come to their doorsteps. MindTree, for instance, opened offices in Mumbai and Delhi in December, 2000, and April, 2001, respectively. And to tap new markets, it opened a London office and a Singapore one in April this year. ''The e-consulting world has to develop a business-backwards perspective and enlarge its portfolio of services,'' says Krishna Kumar, Vice-Chairman and President (Europe and Asia-Pacific), MindTree Consulting. Sums up E&Y's Agrawal: ''There is very little that these companies can do now in the dotcom business. They could perhaps focus on helping their clients with their M&A plans.'' That is more of a corporate kind of a role, where the upstarts will have to compete with well-entrenched behemoths. But then, there is little else to do. -E. Kumar Sharma 1 2 |
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That they did, these dotcom consultants.
But it seems the consultants had to take more than their fair share of
blame for what followed. With little or no business, outstanding bills,
and at the receiving end of all kinds of criticism, many have shut shop,
and some are consolidating to survive.