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March - 2007 - issue > Cover Feature
On-their-marks!
Aritra Bhattacharya
Wednesday, February 28, 2007
One of the biggest multi-language portals offering content in four south Indian languages viz. Kannada, Malayalam, Tamil and Telugu failed to break even for the sixth consecutive year in 2006. Its operational costs for the entire year stood at Rs 7.2 crore, while the advertising revenue for the same period hobbled up to Rs 1.2 crore. The yawning lax was filled in, and the company survived, thanks to robust earnings from its English portal.

Promise in numbers
Against this very backdrop, early this month, Yahoo India launched five Indian language channels on its portal, aspiring, ostensibly, to tap into the ‘burgeoning middle-class populace’. Yahoo’s move was close on the heels of a similar manoeuvre by MSN: The portal from the Microsoft stable had launched its vernacular channels in the December of 2006.

The statistics of the regional game is compelling. India’s Internet user base currently stands at 35 million (that’s roughly 3.2 percent of the population), mostly English-speaking inhabitants of metropolitan cities. As India’s information highway makes inroads into her indolent interiors, the Internet user base will shoot up.

“We are looking at 250-300 million users coming online in the next few years. Beyond the 120 million mark, we will have non-English speaking users who would necessarily need content in their own language,” says Krishna Prasad, Managing Director, MSN India.

“Besides,” notes George Zacharias, Managing Director, Yahoo India, “as tier-II cities hop on to the World Wide Web, we will have a rising segment of users who, though well-versed in English, are more comfortable interacting in their mother tongue.” Keeping these factors in mind, Yahoo and MSN are going to market with the underlying belief that if Internet has to penetrate in India, languages will play a dominating role.

These two global players cannot be called early-movers though. Portals in regional languages as business prospects has been luring entrepreneurs since the ’99-’00, when Vinay Chajlani launched webdunia.com, currently the country’s largest Hindi portal. At around the same time, indiainfo.com was launched with four south Indian language channels. These portals sought to address a diasporic community hungry for content relevant to their areas and their linguistic moorings; the scenario has changed since, with the user base of these websites reflecting more and more of the domestic audience. For instance, Sify.com, which has been running its regional language (in Tamil, Telugu, Hindi, Malayalam, Kannada) channels since 2001 has seen the desi user base grow to 40 percent of its total number.

“This is a far cry from the pre 2005 era, when around 80 percent of the audience consisted of NRIs,” notes Arun Rajamani, Head Consumer Channels, Sify. Oneindia too has seen the desi user base grow to 50 percent of its total number from 25 percent two years back, states B.G. Mahesh, CEO, Oneindia.com.

MSN, which has been operating its five regional channels for the past three months has seen recorded a unique user base of 2.8 million, most of them diverted from the msn.co.in homepage. Efforts are on to constitute the vernacular offerings into standalone vehicles, much like OneIndia’s thatskannada.com and thatstamil.com. “Our goal is to provide the entire user interface in local languages by the next quarter,” says Prasad. He envisions the new channels to pack in more punch once user-generated content starts flowing in.

Currently, all the local language sites rely on a team of in-house language editors. “Typically, a lot of the content in the regional sites is translated from (English) articles available online,” says a source at one of the local language portals. While content from freelancers forms another major part of the offerings, Yahoo reckons syndicatable (sic) content from region-specific newspapers to be the best bet ahead. “After all,” Zacharias mentions, “with time, we need to provide more and more dedicated and localized content to capture the interest of the burgeoning middle class in the villages and semi-urban towns.”

Riddling revenues
While its common knowledge that the disposable income of the aforementioned ‘burgeoning middle class’ has increased, Rediff’s experience with regional language portals clips wings of Yahoo and MSN’s flight. The portal started its language channels viz. Hindi, Tamil and Gujrati in January 2000, but shut them down in July 2003 owing to poor response. Even portals that are seemingly doing good business have been unable to recover the cost of running their vernacular channels by themselves. “About 20 percent of our revenue comes from online advertising on the regional sites,” says Chajlani. “The rest is made up through other offerings like providing content on mobile phones and ads on the English portal.”

Similar is the story of Oneindia.com, which makes most of its money through the English portal to fund its language initiatives. Even officials at MSN are unwilling to share the ad revenue local language channels are or might contribute. “By all estimates, it will be a miniscule number,” says a well-placed source.

Says Dr. Sudhir Sethi, Chairman and Managing Director, IDG Ventures, “It is still a bit too early to bet on this space.” Moreover, while the existent players are going all out to provide services like blogging and social networking in local languages, Sethi, who had invested in Webdunia.com while in Walden Venture Capital, says he would rather invest in companies developing internet-enabled applications for the mobile space. “Moreover, building a top-notch language portal would necessitate an investment of $20 million upwards spread over a period of five years, and the market is not there for such a big investment.”

Manish Agarwal, V.P. Marketing, Rediff.com reckons that the global players are investing their R&D in the local language portal space more to shed their image of having only international content. “Page views for regional offerings have still not shot up and there is still lot of headroom for the web to penetrate the English speaking audience,” he says.

Despite a poor response, the domestic players are holding on to this space in the hope of a buyout by the global giants. While officials at Oneindia and webdunis remain tightlipped about the valuation of their portals, Peeyush Bajpai, director, raftaar.com – a Hindi search engine that was launched in January this year is more forthcoming.

He cites the recent Vodafone buyout of Hutchison India’s stake. “They sold at Rs 50000 per user, and the figure would be somewhat similar in the case of regional portals,” he says, throwing light on the money matters. It may be put in here that all the global players are looking to launch language search, to augment their regional portals.

There are two basic things that are powering the foray of players into the regional language arena. One, as Rajamani puts it, it is way too early to talk of numbers. “It is important to develop competencies in developing communication tools in regional languages,” he says. Secondly, much like the way the TV revolution took shape in the country, with English channels (like Star TV) coming first, followed by their divergence into the vernacular space and eventually, the latter becoming the principle revenue generator, proponents of the language portals believe the same will happen in the case of the web.

Whatever the case may be, all the players seem to taking guard to sprint down the information highway. On their marks, ready to rush into the rustic ramble.

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