Introducing MEDIANAMA: News & Analysis of Digital Media in India

July 1, 2008 – 1:35 am

Last Friday, my new digital media site - Medianama.com - went live with an interview with S. Sivakumar, the CEO designate for Times Private Treaties, the ads-for-equity investment arm of Bennett & Coleman Co Ltd (BCCL), which owns some of India’s largest media properties - the Times of India, Times Now, The Economic Times, Mumbai Mirror, Times OOH, Zoom TV, Femina, among others.

We raised a few contentious issues, focusing on what exactly Private Treaties brings to the table for startups, about investing in competitive businesses, whether editorial content is a part of the deal, and and whether they offer any strategic support at all. It was a long and consuming interview, and you can probably tell by the audio how involved both the interviewee and the interviewer (me) were.

For Medianama, it was an explosive large start - the kind I wasn’t expecting - and I think we’re now settling into the rhythm of analysing developments in the digital media business. A few things will emerge with time - we’ll try to offer significant perspective on the Digital Media industry, while also covering news, and we’ll offer an increased focus on certain domains that are still emerging. The reasoning behind an emerging segments focus: the deeper we dig, the more knowledge we’re able to share about these domains. In effect, we hope to help decision makers - entrepreneurs, investors, consultants and observers - understand the domain better.

It’s not been much of a break for me - Medianama has taken around 3 weeks of work. I worked till 9:30pm on my last day at CS, and finished off with a Yahoo vs T-Series story and the Sify earnings report. I don’t think I wanted a break anyway - I love this domain and love my work…staying away for these three weeks alone was difficult, as you probably gauged by a few posts that I did in the interim.

Medianama will continue to evolve as we go along, and if you have any suggestions, please do share at nikhil AT medianama DOT com.

For now, it’s back to work.

By Nikhil | Posted in Uncategorized | Comments (0)

An update…and another soon.

June 24, 2008 – 12:30 pm

May 31st was my last day with ContentNext Media (and at contentSutra), and I’ve been on something of a sabbatical since. Expect an announcement from me soon. Have done a few posts on this blog - which just goes to show how difficult it is for me to take a break from blogging. contentSutra was an incredible experience for me - something of a roller coaster, and left me completely consumed by the digital media business. Love the space and am committed to being there. All credit to Rafat and Staci for giving an untried rookie so much freedom and responsibility. Rafat gave me the confidence to fight for stories that were deservedly mine, and Staci guided me through many-a-tricky situation. Still remember one of the first few mails from Rafat, where he ended with “Let’s blow this up big.” To some extent, I think we did.

By Nikhil | Posted in Uncategorized | Comments (16)

Funky Reva

June 22, 2008 – 1:25 am

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TenCent To Invest $7.5M In MIH India Over 3 Years; Can Acquire Upto 50 Pc Stake

June 18, 2008 – 11:33 am

MIH India Global Internet, the holding company for Indian Internet properties like ibibo.com, dwaar.com, onefamily.com, Newscola.com and bixee.com, and ad network AdWinks, has entered into an agreement to divest as much as 50 percent stake (less one share) to China based Tencent Holdings. Tencent, in turn, will invest at least $7.5 Million in MIH India over a period of three years, though it has the option of increasing that investment if needed. There are some conditions (of assuming certain loans) under which Tencent can increase its holding to 50 percent shareholding (minus one share).

Burn Rate: Take a look at the losses that MIH has suffered since launch:

Assuming that MIH started operations around August 2006, they’ve suffered a net loss of $18.947 Million in 23 months - an average loss of $1.114 Million (Rs. 4.76 Crores) per month. Some of that money has been spent on acquiring a 30 percent stake in ACL Wireless for $12.3 Million in July 2007, acquiring Bixee and Pixrat (for websites and a team of developers in Bangalore), developing products, allowing users to call each other for free, payouts to users as prizes, sponsoring TV shows like ibibo MTV Superstar and ibibo FTV Fashion Photographer.

Internal company transaction? This may be considered to be an internal company transaction, since the parent company of MIH India - Naspers, owns a 35.5 percent stake in TenCent. Interestingly, I’d heard murmurs of TenCent being in talks with MIH India around a year ago, but wasn’t able to verify. The deal didn’t appear to mean much then, since both are a part of Naspers portfolio.

More on valuation, Tencent’s agenda, and probable launches - Read More »

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Motorola Launches MOTOMUSIC In India With MOTOROKR E8

June 18, 2008 – 11:30 am

So almost six months after struggling handset manufacturer Motorola acquired online and mobile music distribution company Soundbuzz, Motorola has launched music distribution service MotoMusic in India. MotoMusic powers the MOTOROKR E8, two versions of which are priced at Rs. 15.455 and Rs. 13,999 respectively. The launch of MotoMusic is significant, since it comes before the launch of Nokia’s content service Ovi.

Value Chain: This is what the value chain looks like, with a handset manufacturer also becoming a content aggregator. This should, ideally, result in increasing efficiencies, and hence offer a greater margin to Motorola:

Pricing, Distribution and content partners: Read More »

By Nikhil | Posted in Uncategorized | Comments (2)

SatNav Raises $7 Million From Sequoia Capital India

June 18, 2008 – 11:26 am

SatNav Technologies has raised $7 million in a first round of funding from Sequoia Capital India. The amount of stake diluted has not been disclosed, though Mohit Bhatnagar, Operating Partner with Sequoia says that it’s a significant minority stake, and two members have joined the board. SatNav was incubated at Satyam Computers, under the Satyam Entrepreneur Incubation Program. Here’s a brief on the various players in the consumer GIS space (in no particular order):

ARPU and Projections: SatNav claims that it had revenues of around $1 million last fiscal, and 22000 users. That’s an ARPU of $45.5. They’re now targeting 2 lakh users by the end of this fiscal, and assuming an ARPU of $35, they should have revenues of $7 million by then; at least a 7x increase in revenues. Of course, this calculation depends on whether the numbers they’ve mentioned in the press are correct or not.

Burn Rate: FE reports that the funds should see SatNav through the next 12-18 months. That’s a burn rate of between $389,000 - $583,000 per month, or between Rs. 1.6 - 2.5 crores per month. Where will that money go?

For Products, Targets and BCCLs Private Treaty Legacy click Read More »

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Are Horizontal Portals Losing Out To Verticals In India? Not Yet…

June 11, 2008 – 11:32 pm

There’s something amiss in this article in the Mint: it creates the incorrect impression that all Internet conglomerates like Info Edge, Times Business Solutions (TBSL), Consim Info and Web18 are drawing advertising away from horizontals like Indiatimes and Rediff. The article infers that this might be to blame for Rediff’s “declining growth in revenues” - down from just 8 percent up in FY08, compared to 90 percent up in FY07).

The fact is that for sites in the Info Edge, Consim Info and TBSL portfolio, advertising remains a fairly small percentage of revenues: for Info Edge, two quarters ago, it was less than 5 percent of overall revenues. Even assuming that it is now 6 percent of total revenues for the Q4 2008, that’s a maximum of Rs. 4.14 crores. Compare this to Rediff’s online advertising revenues (pdf)of around Rs. 22 crores in the quarter. Frankly, a 42 percent increase in Info Edge’s ad revenues, or a 200 percent increase in Consim Info’s ad revenues doesn’t mean much if the base is low.

For classifieds businesses, there’s better ROI in advertising some of their own services to increase usage. For example, a TimesJobs is more likely to prefer advertising a special package of jobs in, say, Hewlett Packard, as a relationship building exercise with a client, because the returns are greater in the long term, instead of putting up an advert for Sunsilk or BigAdda. Classifieds businesses mostly use Adsense. Horizontals have an ad-sales team, and also use adsense for extra inventory; ergo Classifieds and horizontals aren’t a like-for-like comparison.

The bigger competition is from other content-based Internet conglomerates like Web18, though their collection of sites can well be likened to a horizontal. Then there are other horizontal portals like Yahoo, AOL and MSN. Bear in mind that these sites have a significant online marketing budget, and are able to draw in traffic using search marketing. Then they sell advertising based on these numbers, and make the margin. Since Yahoo India’s revenues have grown 100 percent y-o-y for the last five years, there clearly isn’t a case for verticals taking away advertising from horizontals.

P.s.: The story also quotes Comscore numbers, which I have debunked here. Talk to any of the Internet co’s and they’ll tell you that Comscore numbers are not in line with their internal stats. Also, the term Internet Conglomerates was coined by Outlook Business.

Disclosure: I own an inconsequential number of shares in Info Edge and Network18

By Nikhil | Posted in Internet | Tagged , , , , , , , | Comments (1)

PayMate Closes $9 million Round Of Funding From Mayfield, KPCB And Sherpalo Ventures

June 11, 2008 – 1:43 pm

Mobile payments company Paymate announced (BS, ET) today that they had raised a second round of funding of $9 million. The funding has been led by Mayfield Fund, and Kleiner Perkins Caulfield and Byers (KPCB) and Ram Shriram’s Sherpalo Ventures have also returned as investors. Coruscant Tec co-founders Ajay Adiseshann and Probir Roy will retain majority stake. There are a couple of things to note here:

– The timing of the announcement: There have been reports that the RBI will release guidelines for mobile payments on the 15th of June, and I’m told that there was a seminar in Mumbai last week focused on the implications of these yet-to-be released guidelines. KPCB and Sherpalo have a history of investing in companies, and announcing the funding the time is right, so it’s possible that Paymate received funding a while back, but with all the expected buzz around mobile payments, it’s a timely press release.
– Where’s Citibank? Paymate had launched initially with Citibank on board, but if you go through their redesigned website, you’ll notice that Citibank isn’t a partner bank anymore. So while they added ABN Amro last month, and are in talks with SBI (India’s largest public sector bank), Paymate appears to have lost their first big banking partner. 11 banking partners are still on board, including Standard Chartered, Canara Bank, Cosmos Bank, HDFC (among India’s largest private sector banks), South Indian Bank, etc. Paymate also has operations in Sri Lanka, and a tie-up with Bank of Ceylon.
– The Burn Rate: KPCB had put in $5 million in July 2006. Assuming that Paymate closed the second round of funding in May 2008 and would have finished off the first round by August 2008, that’s an approximate burn rate of $200,000 (around Rs. 80,00,000) per month. This appears to be set to go up - this round, says co-founder Probir Roy, is going to last them 18-24 months. That’s serious money - a burn rate of $375,000-$500,000 (1.5 crores - 2crores) per month. I wonder where Paymate intends to deploy it.

There has been talk before of mobile payments as means of banking the unbanked, but concerns have been raised about KYC (Know Your Customer) norms, since the scrutiny on mobile subscription is not as stringent as in case of banks. But mobile operators have not been keen on working independently of financial institutions because then the money would be shown in their accounts as revenue. Since operators pay a share of their revenue to the government as license fees - 10 to 12 percent - these transactions would lead to a significant increase in their payments. Hence, financial institutions need to be a part of the deal.

Paymate primarily focuses on SMS based payments, which is accessible to a larger number of users. Others in this space include Obopay, MChek, NGPay (from Jigrahak). Earlier this year Tyfone was funded by Ojas Venture Partners. What interests me more right now is the role that cash card companys will play in the mobile space, since they’re not connected with banks - Itz Cash is funded Matrix Partners and Intel Capital.

By Nikhil | Posted in mobile | Tagged , , , | Comments (2)

If you’re spending too much time on the computer

May 31, 2008 – 12:15 am

I’ve been spending far too much time on the PC over the last two years. The result - a sore neck, shoulders, wrist and occasional lower back problems. The ideal thing is to take regular breaks, but if you’re addicted, you don’t have much of a choice. The following are guidelines that I’ve created for myself based on my experience, discussions with friends, and online research.

You might find them useful, but follow these at your risk entirely, preferably in consultation with a doctor/physician. I’m using these guidelines at my own risk.

1. Take frequent breaks, at least every 15 minutes. www.workrave.com is a free software for reminders and exercise. You’ll have to reset the reminder time in workrave from 3 minutes to 15 minutes (or whatever you want). Don’t forget to disable the “Skip” option (which is very tempting).

2. The Chair: is probably the most important element of your office setup - get a cheap table, but get an adjustable chair even if expensive. The features of the chair that I bought (photo attached)

* Back can be raised, so great middle back support
* The arms of the chair can be raised - this was critical for me since my shoulders have been in great pain. My arms used to be suspended while typing, which puts pressure on the shoulder joint and neck
* Neck support - my neck leans forward while typing, so cervical spondolysis can become an issue
* Height of the seat is adjustable, so my legs are bent at 90 degrees or more. less than 90 degrees is not recommended

What’s not there in this chair, but is available in other models:

* Lower back not adjustable
* The seat base cannot be moved forward
* The arms cannot be rotated or pushed forward

Keep in mind:

* No such thing as a perfect chair (in this case, the neck support isn’t perfect, so I place a cushion
* You need a chair with a straight back. So chairs you sink into are not recommended, neither are chairs that arch your back backwards.

3. The Table:

* The monitor screen needs to be placed at eye level, else one tends to lean forward while typing. This can cause back and neck problems. I’ve raised the height of my monitor. Ideally, don’t use laptops.
* Elbows need support, and should ideally be at 90 degrees. I’ve had the height of my keyboard drawer/rest and mouse drawer/rest on my table adjusted accordingly, and the chair has adjustable sides

4. Mouse: your wrist should not be cocked up while using the mouse, so keep some kind of a rest under the wrist. Also, the slimmer the mouse, the less your wrist is cocked up.

5. Laptop?

* Preferably not. Usually, the keyboards are smaller, and touch pads need you to sustain pressure on them for using. Also, since either the keyboard will be raised or the monitor will not be at eye level, somethings bound to give in the long term
* Solution: when at home, connect laptop to an external monitor, and use a USB keyboard and a USB mouse. These are not very expensive, and very very useful

By Nikhil | Posted in Personal | Tagged , , , , , , , | Comments (5)

Overwhelmed

April 2, 2008 – 12:06 pm

Am utterly overwhelmed with tech issues of late….

PC: One hard disk went kaput recently, and I did a reinstall of the OS. Since then, the other hard disk has stopped working. Sometimes the PC just doesn’t load. The system appears to be overheating,and just shuts off sporadically.

Mobile: The screen of the N95 went black during one call. A problem with Nokia service centers is that they format the phone every time, so I’m likely to lose all contact information. Trying to back it up with a blank screen is a major ask.

Net Connection: Sometimes it works, sometimes it doesn’t…the MTNL connection is erratic. Apart from this, the Speed i get from the Reliance connection is not good enough.

Wifi: erratic, again.

Laptop: on a couple of occasions, it’s just switched off on its own. The other laptop has Vista, which makes it unusable.

problem is that much of this is happening at the same time. I tried replacing parts of the PC recently, but that hasn’t helped. The solution - will need to buy a brand new PC (with XP, and NOT Vista). No solution for Reliance and MTNL net connections, or the Wifi. Have to get the mobile fixed,and risk losing all the contacts on my phone. aargh - i should havebacked up more often

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