BT Dot.com: House of Resurrection?

DOT.COM
House of Resurrection?

It made news going up, it made more news going down. Now, the promoters of Indiainfo are hatching a comeback plan. Our take: Oh! Oh!

By Venkatesha Babu

The beginning had all the makings of a fairy tale: rich NRI promoters; a dream-team of professionals; a great deal with the dominant ISP; a slew of acquisitions; and a fair share of media buzz.

The end was, like it usually is, sordid: an agonising retrenchment drive; allegations and counter-allegations of mismanagement and high-handed working style; and several deals and acquisitions that went sour.

The management team, expectedly, seems to be in a state of denial. One of the promoters accuses the media of being in a hurry to write the company's obituary.

No prizes for guessing what this composition is about. Introduce the name Indiainfo into a conversation and reactions range from a polite, ''I haven't visited the site lately,'' to a surprised, ''they're still around?'', to a downright offensive, ''when are they shutting down?''

Sitting in a corner of an office that is surprisingly active for a dotgone (or dotgonnabe), co-founder B.G. Mahesh decides to play victim. ''What have we done to deserve the opprobrium heaped on us? We have not done a Ketan Parekh. The three of us (that includes the other founders Raj Koneru and Madhu Kodali) were doing well in the US. And all we did was launch an experiment in the form of this company by investing a couple of million dollars of our own money. Yes, we did make errors of judgement, but we have paid a huge price.'' Whew!

The follow up act to this part-indignant, part-remorseful speech is performed by Giri Balasubramaniam, Indiainfo's Vice President in-charge of strategy who speaks of something called Plan swift-'S' for strategy, 'W' for win-win alliances, 'I' for innovation, 'F' for focus, and 'T' for teamwork.

That's clever, but what Indiainfo has really done is to cut workforce from 354 to 108, centralise operations in Bangalore; reduce the emphasis on the unremunerative e-com division; and rationalise content coverage. The burn rate, predictably, has gone down from Rs 2.25 crore a month in mid-2000 to Rs 74 lakh now.

That's Rs 74 lakh the company has to make every month. Which it will by monetising content in what it considers its core areas like news, movies, sports, and travel, increasing advertising revenues, and focusing on tech services. Advertising, claims Bhanu Chalsani, Vice-President (Technology), is Indiainfo's strength. ''A majority of our users are NRIs. And we were the first portal to launch language editions which seem to be in great demand among NRIs. That makes us an attractive advertising medium.''

Another source of revenues has been tech services: Indiainfo built Parke Davis' B2B portal, Agriline, provides e-mail services to companies like EID Parry, and takes care of tech maintenance work for companies like h-p and British Airways.

All this tots up to just Rs 45 lakh, well short of Rs 74 lakh. Mahesh says Indiainfo will break even by December 2001, when its expenditure will come down further to Rs 66 lakh, and it income, rise, to Rs 66.5 lakh. ''According to the Alexa rating, we are the number two India-based portal; we've invested 15 million dollars in the business and have the financial wherewithal to weather any storm. We will break even without the NASDAQ cushion.''

Still, it's hard to be positive about the future of a portal dependant on advertising revenues. ''Sixty five per cent of our revenues will come from advertising. We know we cannot depend on ad revenues alone,'' admits Mahesh. And the tech services domain is a minefield with every second dotcom struggling to pay its bills, identifying it as an attractive alternative revenue stream. End word: we'll wait till December, but will speak no longer of how the company slashed costs. That would be making a virtue out of a necessity.

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