Hitesh Oberoi is the co-promoter, director and chief operating officer of Info Edge India, the company which owns a number of sites including Naukri.com, NaukriGulf.com Jeevansathi.com, 99acres.com, Brijj.com, Shiksha.com, AllCheckDeals.com and Quadrangle.

Prior to joining Info Edge (Naukri), Hitesh Oberoi was regional planning and distribution manager (North India) for the Ice Cream Division of Hindustan Lever Limited, where he worked for almost four years.

In an exclusive conversation with AlooTechie, Hitesh Oberoi shares his experiences of doing business across verticals in the online space and the future of these businesses in India.


What made you switch from offline to the online space?

I always wanted to do something on my own. However in the end I became an entrepreneur by accident. I had been with Hindustan Lever for four years when I decided to do something different. In those days, we didn't have Naukri.com or other such services, hence, it was actually quite difficult to look for a job.

One day I came across a half page ad in the Times of India which said, “Do you want to retire in 3 years or 35?” There was no company name mentioned but I sent my CV across. Later I got a call from Microland for an interview with Mr Pradeep Kar. I went to meet him at the Park Hotel in Delhi and he asked me if I would like to join him to start a new web venture he was planning (ITspace.com).

Only two months before that, I had bought a computer and had started surfing the net a lot at home. I studied some sites and went back to him (Pradeep Kar) with a one page note on what ITspace could be all about. This was in August 1999. That’s how I got involved in the internet space. I had known Sanjeev (Sanjeev Bikhchandani, founder of Naukri.com) for a long time and went to him for advice on whether I should take this offer from ITspace.

By then Naukri was about two years old and was being run out of Sanjeev’s house. At that time not many people knew what the dotcom business was all about. Naukri was doing Rs 2-3 lakh of revenue and nobody knew how big the net could become. Sanjeev suggested that since I had made up my mind to leave HLL maybe we should work together on a new project. I ended up partnering Info Edge to start a new site called Bachao.com. For a couple of months I ran Bachao while Sanjeev and Saroja (V N Saroja, a co-founder and former COO of Naukri.com) focussed on Naukri. Bachao was a local discounts database site. That's how it all started for me.

HLL wanted me to serve a three month notice period and in those three months the world changed. Dotcoms mushroomed; suddenly there was a lot of VC funding available. I remember one new dotcom coming up every few days. That was boom time. After I joined, we realized we needed to raise money as well. JobsAhead had just got funded. ICICI Ventures agreed to back us. But they told us that Bachao would have to shut down since they wanted us to focus on only Naukri. My new venture with Info Edge came to an end and I moved full time into Naukri.com.

When do we see a clear leadership from other Info Edge properties like Naukri?

According to the latest comScore ratings, Naukri has close to 55 per cent market share in the jobs business. But it had a 2-3 year head-start over competition. A lot has changed since then. The internet world is more competitive and we don't have that kind of head-start in our new businesses. Even though it’s still early days we are leaders in both real estate with 99acres and education with Shiksha.

What we know for sure however is that there is a demand for these new services and these businesses are growing rapidly. We don’t know how much time it will take for these businesses to become as big as Naukri, but they are growing much faster than Naukri although on a smaller base and in three to four years they will reach a significant size.

Among all the Info Edge businesses, what is your personal favourite for the most accelerated growth in the future?

Well, all these businesses are my favourites as we started them all. In revenue terms 99acres will become our second largest business this year. We are very confident about Shiksha, it's a very young business and we feel we have a good product. We feel the market is just right for a product like this. We are getting reasonably good traction on Naukri Gulf and AllCheckDeals as well. Quadrangle has surprised everyone with its rapid growth over the last two years.

Jeevansathi is a good business, but it is still number three and that is a bit of a challenge. It is still growing at 40-50 per cent a year. Whether it will become as big as Naukri, I have my doubts. I don't think the matrimony space is very big. It is a consumer to consumer business unlike our other businesses which are business to consumer in nature.

Do you see Shaadi retaining leadership of the matrimony space?

Well Shaadi and BharatMatrimony are both pretty strong players but I think they are both losing money still. What we have managed to do in the last two years is segment the market. Unlike jobs where job seekers move across cities and employers have offices in multiple cities, within arranged matrimony people marry within a community. About 95 per cent of all arranged marriages are within the same community and may be 75 per cent are within the same caste. Hence, we have consciously segmented the market.

BharatMatrimony is very strong in the South and Shaadi is very strong with the NRI (non-resident Indian) community and in a couple of metros. Jeevansathi has become very strong in the North and Western parts of the country which include UP (Uttar Pradesh), Bihar, MP (Madhya Pradesh), Delhi, Punjab and Haryana. About 50 to 60 per cent of the traffic on Jeevansathi.com is from tier II cities in India, and not from the metros.

If you look at our marketing, it's focused on the North and West among Hindi and Marathi speaking people. I would say we (Jeevansathi.com) are number two in some markets and number one in a few. Overall, we are number three. I don’t see us becoming No.1 in the next 1-2 years but I feel we can run a medium sized healthy profitable business if we execute well.

Considering once someone gets married he or she is out of the matrimony market, how do you see the space growing?

The space will grow as internet penetration grows and India becomes more and more urbanized. If you look at the online matrimonial business now, people end up using websites only when they are unable to find matches through friends and family. For example, the biggest users of matrimonial sites are NRIs. They are separated from their mother community and it is very difficult for an Indian who stays in Texas (US) to find a right-match if he or she wants to marry an Indian. After the NRI community, people who use matrimony sites are those living separately from their mother communities in Indian cities. Then, there are people from metros and then those from tier II towns and so forth.

As more and more people move online, the database will increase and there will be more choice available. Secondly, with more people moving from rural to urban India and from small town India to bigger cities, they will get separated from the mother community and start depending on the internet to meet people from their community. That's how the market will grow over a period of time. However, nobody can force this market to grow beyond a certain level because this is not a business to business model where you can get one lakh untapped customers through your sales force.

What about retaining people who got married through Jeevansathi? Do you feel that providing value added services like a post marriage honeymoon package would help grow the matrimony space?

Not many sites worldwide in the dating or matrimony space have been able to provide value added services successfully. The reason for this is that people don’t get married within a few days of connecting on the internet. Once people meet on a matrimony site, the relationship moves offline and then the couple could take some months to get married. You are right when you say that once people are successful in finding a match, we lose the customer. And good business sense suggests that we should be able to make more money out of our happy customers. However these happy customers recommend other customers and help us bring down our customer acquisition costs over time. Can we offer value added services to people who have got married through the site? May be yes but why only to people who get married through Jeevansathi. These services can be offered to anyone who gets married. But that’s a different business because those services would largely be offline services. I am not so sure if Jeevansathi wants to get into that space today but who knows, maybe two years from now!

What are your thoughts on performance-based marketing model that Naukri has been following for a number of years? Would you continue with this model or the whole brand building aspect that seems to be talked about a lot these days can also move online? Because Naukri is known to build its brand offline, for example the Hari Sadu commercial, and advertise online through performance based model. Where do you see the balance? How do you see this going forward?

If you look at our advertising so far, we have been trying to do a little bit of both. We have been trying to build the brand using offline media so that we get a lot of direct traffic. About 95 per cent of the traffic on our homepage (Naukri.com) is direct traffic; we don't have to advertise online for it. We have a database of over 15 million resumes and these guys come back on their own. We don't have to advertise again and again to get them back on our site. Still, we continue to advertise heavily on search engines and sites like Yahoo to get new customers especially in markets where we may not be so well known or with customers who are just getting onto the internet. At the same time we continue to advertise offline to build the Naukri brand and create a recall value with job seekers and recruiters and to get direct traffic. Increasingly, our focus is on getting direct traffic and that's what we are trying and do in all our businesses.

In a way, the internet is a distribution medium for us where people see our brand name on different sites, click on those ads and come to us. But to make people prefer us over some other brand, we use the power of television. We are also experimenting with online branding campaigns including banner ads and big display ads to see whether they have the same effect as a TV commercial on the consumer’s mind. We have been trying out online brand advertising for a few months now and the results are encouraging. However it’s too early for us to say whether online brand advertising has the same effect as a TV commercial.

But TV does have its distinct advantage, even for an online business?

TV does have its advantages; it’s actually cheaper if you want to reach the masses. If one wants to reach crores of people who are not online, TV is the best medium. You can say a lot in a 30 second commercial and the impact one can create through a good audio-visual creative is much higher than online banner ads. It’s riskier as well. One bad creative and you could end up losing a few crores very quickly. However, if you want to target only internet users, online advertising would be cheaper and perhaps more cost effective. But it is very early for us to say whether online brand advertising has the same kind of impact as offline.

How is Shiksha doing and what do you feel about the online education space in India? Also, please throw some light on StudyPlaces and Applect investments made by your company.

The education space is big. Indians, every year, spend billions of dollars on education. Till last year, there was no education site on the internet doing great business. Although, it's too early for us to say how Shiksha is doing the early results are encouraging. We are getting good traction on the consumer side and we have advertisers as well. We are making serious investments in this space. When we go to an education provider today and say we are from Naukri and Shiksha will be the Naukri of education it doesn't really take too much time for them to sign on with us. The difficult part is getting students to come to our site without having to spend too much on advertising. That's what we are working on.

As far as the education space goes, all kinds of models are being tried out. There are portals like ours, there are e-learning sites and then there are community sites. Though everybody has a business model in mind, nobody is very big yet. Our take on the space is that many models will emerge and succeed over time. With that sort of thinking we invested in StudyPlaces and Applect.

Applect is an e-learning company in the k12 (KG - Class 12) space. We believe that over a period of time students will want to supplement their course material with online content and teaching aids. We have a small investment in StudyPlaces. StudyPlaces is a strong player in the overseas education space.

What is the difference between the models of Shiksha and StudyPlaces?

Shiksha is focused on domestic education, while StudyPlaces started with focusing on overseas education; so, the two segments are really different. I am not saying Shiksha will not move into international education or StudyPlaces won't get into domestic education, but the initial thrust areas for both sites are very different.

What's the revenue model of Shiksha?

Shiksha gets revenue from education providers like institutes, coaching centres, test preparation companies, vocational training institutes, MBA, engineering colleges, distance learning providers etc. Beyond the top 50 or 100 engineering colleges, the top 20 or 30 management institutes and another couple of hundred colleges, students don’t really have much information about the options available. Most other colleges need to work really hard to attract students. This is why these institutes end up spending Rs 700-800 crore a year on advertising in print. All we want is a certain percentage of that to move online over the next 2-3 years.

How will Shiksha help institutes and colleges to get students?

Shiksha is an education search engine. Students in Patna, for example, can use Shiksha to find out more about the best engineering colleges in Delhi. Institutes can use Shiksha to attract students for their courses if they put up detailed information online on admission processes, admission forms, courses, campus information, and placements.

In addition, Shiksha will provide counselling and advice to students on the various career options available. Students can ask questions which can be answered either by other students or experts. Students will come to Shiksha for content, to seek advice and to find out more about colleges and courses while education providers will use Shiksha to advertise their courses and tell students why they should be enrolling with them.

Will Shiksha also allow students to submit application forms online for various institutes?

Most institutes as of now, actually, do not give students the option of submitting forms electronically. However, forms can be downloaded from many institute websites and submitted offline. Submission of forms online is a problem mainly because of issues like photographs and signatures. Shiksha will over time work with these institutes to move the entire process online.

Given the fact that global networking sites are very popular and successful in India, how do you see Brijj competing with LinkedIn or any other global networking website?

Brijj won't succeed if it tries to do what LinkedIn is doing. Orkut, Facebook and LinkedIn are first-movers and it is difficult to dislodge successful first-movers. Brijj will have to be different. We may have to provide a different sort of networking experience because the Indian consumer is different and hence his requirements are different. This is something the Brijj team has to discover over time.

Are you doing something to address this challenge in terms of not having the first mover advantage? Are you experimenting with new ways to connect with new users?

Because of the integration with Naukri, Brijj already has close to a million registrations. The problem is that these people are not networking on Brijj. Unless people start building networks on Brijj, Brijj won’t become valuable. The Brijj team understands this and is working on some smart features to differentiate the site from LinkedIn. One such feature will be launched shortly.

There is a contention that it will be difficult for social networking sites to monetize or make money. What’s your thought on this, especially for Brijj?

Brijj is a professional networking site. You are right, networking sites which are purely dependant on advertising are not making too much money. This is because users don't seem to click on ads on networking sites. The reason we set up Brijj is to get a share of the money being spent in the passive job seeker market - a market which works on referrals and head hunting. The model here could be subscription. Of course, we also have a network of advertisers and Brijj will also make some money through advertising.

As of now, Info Edge is in the classifieds space. Do you have any plans for the content space?

We have invested in a few startups. We are open to investing in startups in the content space as well. Will we do something in-house in the next six months in this space? – I don't think so. And would we be keen on user generated content? – Probably yes.

On that note what's your thought on Build versus Acquire -- acquisition versus developing products in-house?

Actually, realistically speaking, there aren’t too many companies we can acquire. To give you a sense of the Indian internet space, I think Info Edge is the No.1 player in terms of revenue in India. I don't know Google's India revenue but I think they are pretty close to where we are. Then you have companies like Yahoo, Indiatimes, Rediff and Monster India in the Rs 100-150 crore range (in revenue) and then you are down to maybe 5 -7, or maybe ten companies in the Rs 40-50 crore range. So, across verticals, there are not too many companies to acquire. But we are open to acquisitions at the right price and in a space that makes sense for us.

What about the investment fund that you have? Are some companies in the pipeline? I mean besides StudyPlaces and Applect.

We just closed an investment in PolicyBazaar.com. There are a few other companies we are looking at.

Would you prefer hundred per cent acquisitions or taking a minority stake is the way to go forward?

So far, we have not taken a majority stake in any company we have invested in. We would like to be significant investors in any company we invest in. So as a minimum a 25 to 30 per cent stake is what we would look at.

Tell us about some of your strong points that, according to you, other companies in competition to you lack?

First and foremost I think we have managed to build and retain a great team. Most of our senior managers have been with us for years and have grown with the company. As far as our properties go we have managed to build IPR (intellectual property rights) and entry barriers which may not be visible to a casual surfer. For example, the Naukri search is robust, scalable and the best in the market. Our matching algorithms, whether in Jeevansathi or in Naukri, are the smartest. We have massive reach on the ground through our network of 56 offices in 42 cities and over 1200 sales people. As a company we are very entrepreneurial and ambitious. As soon our jobs business became profitable we ventured into other verticals.

Where do you see the potential of vertical or niche job sites? Do you think they can be your competitors?

Some verticals job sited have done well in the US. But then the US is a huge economy. Today, the Indian market is very small and hence it is not easy for a vertical site to build a viable business. But some vertical spaces will definitely become viable 5 -10 years down the line. So whenever we feel that a vertical is viable we will probably launch it ourselves. We have already announced a site for campus hiring – FirstNaukri.com.

Having said that, the core job sites are getting smarter and are doing things that the verticals are supposed to do. Naukri itself is becoming smarter and is trying to personalise its offerings to different user segments.

What is your personal take on the online space in India? How do you see it growing and moving forward?

If you look at China, they are already ahead of the US with more than 200 million internet users and at least 10 high quality listed internet companies. Nobody knows when the same will happen in India. The Indian internet market, beyond 80 million users, is not English. The Indian market is vernacular and lies in Hindi, Marathi, Telugu, Bengali etc. I don't think more than 80 million people in India are comfortable with English.

But that’s fine. The No. 1 English newspaper in this country has close to 10 million readers. The most popular TV programmes don’t reach more than a few million people. Most Purchasing Power lies within these 80 million people. With the spread of broadband these 80 million people will spend more and more time on the internet and less on other media.

A lot of young people, today for example spend three to four hours on internet and just half an hour on TV and their numbers are increasing every day. So, as an advertiser, how do I reach them? If I spend on TV or on newspapers, I will end up wasting money. Many young people don't read newspapers anymore. Hence, advertisers will be forced, over a period of time, to move their ad spends online because their offline spending will become inefficient.

When do you see this happening?

This has already started happening but I think the internet industry needs to do a lot more to educate advertisers about the media habits of consumers.

How to convince advertisers who do not feel encouraged to come online for brand promotion? Some brands say how do I know if I spend say Rs 10 crore online what did I get out of it?

How do advertisers get to know about their returns from TV or Print? Sure both TV and Print have their advantages, but you can only create an impact if people see that advertisement. So, if the target audience is not on TV, how can a TV commercial create any impact?

Over the last eight years, our Naukri sales team of around 500 people has educated the HR community on why they need to advertise online. I don't think that has happened for general advertisers because in the general advertising space, everything is mostly done through agencies and most traditional agencies in India don’t really understand how internet advertising works.

On the other hand Google has done well because a) all online companies advertise on Google, they can measure what they are getting and they can control their budgets, b) small advertisers are also moving their budgets online because they cannot afford to advertise on other media and the internet works for them.

Brands that advertise offline really need to ask themselves: a) does my current agency understand internet advertising, and b) what are the media habits of my target segment – how much time do they spend online?

In the present scenario, what kind of brands should look at online advertising?

Youth brands. If your product is for young people you need to advertise online. A large proportion of all internet traffic is from people in the 16 to 35 age group. A large percentage of them spend more time surfing the internet rather than watching TV or reading newspapers. The online medium is the cheapest and the most effective way to reach them.

Do you think that targeting urban youth as online audiences will be contrary to the way the industry should grow in terms of revenue, where you mentioned that till people from smaller towns come online, the space itself will not grow?

As a marketeer I need to understand my target audience, identify their media habits and then design advertising campaigns to reach them in the most cost effective manner. So, if I wish to reach out to people in Tier III cities and in rural India then television is probably a more cost effective way of doing so today. However if my TG (target group) is, for example, young people in the metros where a large number of people are online, internet is probably more appropriate. It’s not an either/or decision. Most brands will probably want to spend on both TV and the internet. As an internet company I need to identify those youth oriented brands whose primary target segment is online. For instance, online ad campaigns for brands like Levi’s and Axe make a lot of sense. These are the brands that advertise on MTV, Star Movies and HBO. And I think these are the brands which should advertise on the internet.

Which verticals are exciting for you, apart from the classified space?

I think, generally speaking, entertainment is a hot area. Indians love Bollywood, they love music and they like to watch films. And so I think a lot of users will consume entertainment content on the internet. So, that should be an interesting area for a lot of companies. Info Edge per se is probably keener on marketplaces and businesses with a user generated / community element to them.

What are the three main criteria that you consider before investing in a startup?

First and foremost, we look for a good well rounded team which wants to run the business for a very long time. Secondly the space, because only if space is right can a good team build a great business. The third thing that we look at is that whether it makes sense for Info Edge to be in that space. It should not be in an area we have no competency in.

What’s your view on mobile internet?

Internet on the mobile will happen when speed improves and access becomes cheap and when mobile phones supporting high speed internet become affordable for a large number of people. However, in between, there will be a lot of noise and a lot of business models will be tried out. But in 2-3 years as speeds improve, screen sizes of phones get bigger and prices fall, internet on the mobile will be as good and as big as internet on a PC.

Looking back, tell us about one goof-up that you have made?

When JobsAhead launched in 2000, they launched with a database access product, which is, today, our biggest selling product. But we (Naukri) were just a job board. We took almost two years to launch a comparable product because we did not invest enough in product and technology to start with. Those were early days; we really did not know how things would pan out. By the time we launched our product - Resdex, JobsAhead already had around 4.5 lakh resumes and a large customer base. Another year and things would have become very difficult for us. Thankfully, we always had good traffic on our site and in about a year or so we were able to catch up with JobsAhead and then move ahead.

Generally speaking, we did not invest enough in Product and Engineering in the early years. In fact, we have done more work in the last one and a half years than we did in the first eight years on the Product side in Naukri. Part of the reason was that in the early years, after the bust, we had to save our money and were very cautious about spending it. The funding environment was not so good for at least three to four years after we took money and in those years, we were completely focused on sales, because of which we survived, but we ended up ignoring technology.

The Indian internet industry is facing talent crunch. How do you suggest companies to face it?

First, retain the people you already have! Secondly, have an attractive ESOP (Employees Stock Option Plan) plan and believe in sharing your wealth. A lot of bright people feel that the internet is still a risky sector to get into as there aren’t too many success stories; so why should they risk everything and join an internet company instead of joining a Citibank, HDFC or Hindustan Lever. There are many people who love the internet space but they are scared. If entrepreneurs share their wealth and say look if we are successful you will also be successful that will improve our odds of getting good people into this space. Thirdly, it’s important to have a culture where you allow people to experiment and empower them to make important decisions. This is still a rare phenomenon in established old economy companies and can help this industry attract people.

There have been general portals which are in operation for more than 10 years and still they are not as successful as any of Info Edge's properties. What according to you is the reason?

The value that portals offer today is mainly email, messenger and some content. Increasingly, content is getting more and more verticalized. So, if portals start losing their email and messenger traffic, they are in trouble because that's what gets people onto the portal in the first place. Not many people today go to portals for news or for social networking or even for watching videos. Unless the portals get some new killer app going, I think the internet will get more and more verticalized over time.

But there are some portals which have good properties within, but these properties don’t get discovered because they are under a master brand and often one click away. Portals should think along the lines of taking such properties out and making them separate businesses. That could be one way to take the business forward. May be these properties can be spun off with separate business teams and then these businesses can become big over a period of time.

What business models should startups stick to? Should they focus on content or applications or services? Where do you see the money for startups?

In most internet businesses the top two companies get a large part of the revenue and almost 100 per cent of the profit. So, if you want to do what five other companies are already doing whether in classifieds or in the content space or in the applications space then it’s not going to be easy. But if you do something different and there is a consumer need for the product, the chances are that the business will make money.

Please share the experience of your offline to online jump?

Frankly it was not difficult at all. In the early years, we worked more like an offline company than an online one. We were focused on sales and break-even at a time when other companies looked at page views, eyeballs and valuations. Running an online company is not very different from running an offline company; the basic rules of business are the same. Building a consumer internet brand is not very different from building a consumer FMCG (fast moving consumer goods) brand. It’s about the same things – getting your product, user experience, customer service, sales, advertising and distribution right. In fact, there are several advantages of operating in the internet space -- you can make changes to your product almost daily and you can quickly measure the impact of every change.

Personally, I feel that people are going to be surprised to see how big the internet will be five years from now. The young urban Indian is increasingly consuming more and more media online and that is what advertisers need to look out for.

What would be your strategy for MySpace in India?

Internationally, our strategy has been around the user base. We try to build content and make sure that our users are part of it. Even in India we are trying to build content. All our media campaigns, be it offline or online, that we launch here will be more related to building content and making sure that our users are part of it.

Why did you choose to organise a rock concert to announce the launch of MySpace in India?

MySpace.com’s back bone is music. Globally, all the rock bands, all the people who are into music have a MySpace profile. But that doesn’t mean we are just catering to music. Our focus is to cater to all the talented people in India, may be an upcoming model, an upcoming actor, a film maker, software developer or a cricketer. We want to give them a global platform wherein they can display their talent. That's the idea, that’s what MySpace is all about.

So can we call this the USP of MySpace in India, that it’s a platform to enable people showcase their talent?

Yes. In India, we have a very talented bunch of people. But entertainment in India is overpowered by two things -- Bollywood and Cricket. Though, I am not saying that's a bad thing, it’s great. Let's have that. But if you see around, there might be more people who might be singers, dancers maybe a chef... who are really talented. And we have to give them a platform so that they can display their talent and we would like MySpace to be that platform and we are trying to build that platform.

There is a clear DNA connect between India and MySpace because India is full of talented people and MySpace wants talented people to showcase their talent through this platform. MySpace is just not another social networking site, it’s beyond that. MySpace not just connects you to your friends but it can also connect you to people with similar interests and give you a platform for your talent.

In a country where Orkut and to some extent Facebook have already made a significant presence, how would MySpace try to make an inroad?

No user will be associated with a single social networking website. One might be a part of a professional networking website for getting a job, while if I want to connect with my friends I could be on a casual networking site. So, I can be a part of multiple social networking sites. It's not necessary that if I have been a part of one then I can't be a part of the other. There is no exclusivity deal a user signs with the site when he or she joins it.

The other thing is MySpace is not just a social networking site. It’s a combination of a video blogging site where you can upload your own videos or watch other uploaded videos; a site where you can connect with your friends; also where you can have your work qualification displayed and try to get a new job; it’s all rolled into one. MySpace is more on the frame of a social media portal where we can create user generated content and we are trying to spin everything around it. Of course, it's networking at the end of the day where you can network with your friends and people with similar interest also but you can do much more than that, it can be your own place, your own space

And when you look at the overall internet penetration in India you will realize that the party is not even started yet. We are still on the edge of the tipping point for internet in India so it’s difficult to declare winners yet.

What would be your focus for MySpace in India, to capture the attention of existing users or try to increase the pie?

To increase the number of internet users in India, I guess, that has to be done more at the macro level where the government can play a significant role. The internet population in the country is about 35 million while mobile population is about 240+ million. On internet there are millions of websites, on mobile no great application. So, we are caught on opposite situations where in mobile you have a user base but limited applications and in internet you have less number of users but we have numerous sites to choose from with minimum product differentiation.

Of course, we have been seeing lots of revenues pouring in, though I won't say it's like great. If we look at the total advertising market it’s close to about five billion odd dollars; internet is close to about 100+ million dollars, not even one per cent. So in a whole everyone would have to collectively make sure that we sell it (internet) in the right way. And when I say to sell it in the right way I mean it has to be a part of the overall strategy for the advertisers and not be a part of just the media plan.

Most of the times, what happens is when you talk to an advertiser or its agency you talk to them very late. This is because you are only a part of their media plan. So for example, if an advertiser has a budget of Rs 20 lakh on the internet he might spend a percentage of that on few internet properties. At the end of the day, you are only fighting for the share in that twenty lakh. What if internet becomes the part of the strategy and one talks to the advertisers and agencies when they are actually building the strategy for a new product and they trust you to be a part of that strategy – automatically the budget on internet will be enhanced. Now instead of the 20 lakh which was apportioned on the internet it might be 1 crore, thus increasing the internet advertising pie. So, if we are part of the strategy we can get more advertising budget on internet.

How will MySpace go about it?

We have to win the confidence of advertisers in a way to make sure they include us in their strategy. And with the low penetration of internet in India this task becomes difficult. But one way to approach this is to integrate online with offline media and give the advertiser a 360 degree solution. We plan to integrate the online and offline media with the properties we will roll out in the market.

Potential is big: if you look at the growing online advertising market in India which is split between key verticals like finance, travel and online classifieds services. I guess, these three verticals command 80+ per cent of the market which means there is potential to get more advertisers on board from more verticals. We plan to grow the internet advertising pie from the existing users and also educate new advertisers about internet advertising.

For example FMCG (fast moving consumer goods), consumer durables, automobile advertisers contribute major percentage of the total advertising pie in India but not much to internet advertising. If they increase say from one per cent of their spending on internet to five per cent that itself would be something substantial for the overall pie of internet advertising.

We at MySpace have unique offering in the way of building custom communities for the advertiser where we bring out the live experience of interacting with the brand and give the user the opportunity to not only interact but be friends with the brand and thus triggering off a viral effect for the brand.

There is an opinion that social networking may not be suitable for advertising as the users may get offended when they see an ad on their personal profile page or on their community section and may consider it as a breach of their privacy? What's your take on that?

Impact of advertising on social networking websites can be gauged by factors like how many users interact with the brand online and for how long and how often. We have been building such solutions for advertiser and have great success stories – for major brands across the globe. We have many success stories in our international markets which will be replicated in the Indian market.

The key is to package the advertising as a part of their social web experience. The power of social networking website is that the user is in a mode to find new friends and new things and if we influx the advertising message through way of making it possible for the user to be friends with the brand then it is not in your face advertising for the user making the user experience the brand.

So, there is a way out?

Yes there is way out and we have proved this in international markets by creating branded custom communities for our advertisers and they have received great success. For example, we ran a custom community in Europe for Intel which was to position Intel as a brand that ‘multiplies music’. This community has 60,000+ friends and is still growing with over 6 million views. You can check this community at http://www.myspace.com/intelpowersmusic, though not sure if you can see this in India as it might be Europe IP targeted.

We also have tools like hyper-targeting wherein we can only show ads to people who have actually asked for certain things. So, a user when he makes his page and says I am interested in music, movies, the tools can display relevant ads to those sections. We are sure that our tools like hyper-targeting can get us better performance.

Considering that there are about 30 million internet users and more than 200 million mobile phone subscribers, do you have a strategy for mobile?

Yes, mobile is one of the core things though I can't talk in detail about it. It’s one of the core things that we are going to look at. Mobile is growing at a phenomenal pace.

The unique thing that we have in India is that many users or many people would be experiencing internet for the first time not on the desktop but on their mobile. They are so attached with the mobile. I guess it's the next best thing, may be to your girl friend or your wife; you are not with your wife for so long that you are with your mobile, so it's your best friend. And your best friend is giving you so much; it's giving you a window to the world. So there are going to be things which are going to be rolled out for the mobile audience.

Have you allocated some marketing budget for MySpace and are you going to use only online or also TV, print etc?

We would go for a mix, but our focus right now will be on building properties with powerful exclusive content. So first, we would be investing resources to build content, then, we might invest in marketing it on TV , Print or online advertising. When you try to build a product through advertising what happens is that you get a jump there but later on it actually fizzles down once your advertising comes to an end. But if you have content and especially exclusive content it helps you build constant strength. So the focus is going to be on building content.

But how will you get users on to the site?

We are definitely going to do it but the focus is going to be on building great properties with exclusive content. We would rather let the content speak for itself; let the content attract the users on its own. Of course we are going to do a fair amount of advertising.

How many users are you expecting in one year down the line, from India?

Currently, we have half a million users from India, according to comScore. And we have already grown 30 per cent month on month. And this was before we launched officially in India. We haven’t done anything specific yet but there are plans to roll out few properties soon. You are going to see a lot of things on the localization front.

What is the status of social networking space in India? How do you see the local social networking sites which are already present in the country?

Social networking has become a cultural phenomena in India and socializing on the net is one of the top activities for the Indian users. People in India like to express themselves and share their lives both online and offline. Another reason for the popularity has been that people in India use the social networks to meet new people of similar interests around the world. It also gives them the global platform to connect with new people.

The top activity of the internet user in India still remains emailing but in the last few years activities like job search and online music have also caught on. According to the eMarketer’s 2007 report, 51 per cent of the internet audience used internet to socialize with other people, as against 27 per cent in 2006. The report also states that social networking is one of the top activities on the net. With social networks the users are spending more time on the internet and also encouraging new users to come online due to the viral nature of social networks. The increase in the number of online users is definitely helping the growth of social networks in India. And I am sure there is a place for everyone, be it a local or international player if it can differentiate it well.

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Deep Malhotra is the Director of Sales & Business Development for MySpace India. He is part of the MySpace India founding team and he manages sales operations, business development and partnerships across the website. Prior to MySpace, Deep was part of the Google India founding team and was part of the team to setup the sales operations in India. Prior to Google, Deep worked at Rediff.com. Deep has also done a stint of entrepreneurship between 2000 and 2004 where he was the founder of Onmag.com. He has a MBA in Advertising & Communication from Symbiosis Institute Of Business Management, Pune and Masters of Mass Media from Mumbai. Deep is a movie buff and also writes and directs short movies in his free time.

People Interactive’s online real estate portal Makaan.com is organizing its Property Show in Pune on 15th and 16th March 2008. The company is expecting over 20 leading developers to showcase more than 50 new project offerings at the Property Show.

“After the overwhelming response from the recently concluded property show in Hyderabad, Makaan.com envisages to redefine the real estate expectations for the Pune residents. Apart from having over 10000 listed properties, Pune also accounts for 12 per cent of total website traffic on Makaan.com,” People Interactive has said.

Reliance Entertainment, a part of the Reliance Anil Dhirubhai Ambani Group, is planning to launch at least eight new websites, including a jobs portal and a classifieds site, this year, reports LiveMint.

The company already owns an online gaming portal Zapak.com, a social networking site BigAdda.com and an online movie rental and download site BigFlicks.com.

Reliance Entertainment recently received $100 million (about Rs 400 crore) from celebrity investor George Soros who acquired 3 per cent stake in the company.

Guruji.com has been an India focused search engine for sometime now. They recently launched a mobile version for their site. We caught up with Anurag Dod, CEO and Founder of Guruji.com for a quick round of questions relating to the company and their search technology, among other things.

What is the story behind Guruji.com and what made you change the name from Terrawiz.com?

The story behind Guruji is really simple, we (Anurag and Gaurav ) were both working in the Silicon Valley in the US and were witnessing some disruptive innovations that were changing the way in which people use internet in their daily lives. The Internet space in India still seemed underserved, especially the search engine space. There was no Indian player that was tackling the problem with a complete technology solution. Given our experience in the search technology domain we felt confident that we could make a difference. We created a first prototype (Terrawiz was the prototype) taking into account certain peculiarities of the Indian search usage. We approached the Sequoia folks with the prototype, and they were impressed with our commitment, vision and ability to execute, and decided to back the venture. The name change came about as we wanted something that was catchy, easily communicable and represented the aspirations of the company as a search engine, and Guruji was the name that did that.

What are your plans for monetizating Guruji? Are you planning to launch something like Google AdWords?

The plan to monetize is to allow advertisers to target the consumers based on the keywords that are being searched for. This is a proven business model and we believe that it has tremendous potential in India as well. We believe for SEM to really take off in India, innovation will have to happen around the specific needs and constraints of the Indian advertisers. This is a huge opportunity area. We are creating our own advertising platform and have already started accepting advertisements.

Tell us something about your plan to enter into partnership with websites to power their search engine? How many websites have opted for Guruji to power their search engine? What kind of challenges do you face in getting more websites on board?

A few hundred websites have entered into partnership with Guruji.com to power their search. We have had a wonderful response from these partners and the value that Guruji.com provides to them has ensured that they stay with us, and also refer other sites. A large number of these websites have joined us through word of mouth. The challenges we face are different at different points of time. When we started, we faced brand awareness related challenges, which is not a big challenge anymore. Today most of our challenges stem from our endeavour to bring more and more value to our publishing partners, which works towards making us better everyday.

On an average, how many search queries do you get a month? What is the percentage of regional search queries? Also, could provide some idea about the break-up of search queries conducted in different regional languages?

We are a private company and we usually refrain from sharing these numbers. To give you some indicative numbers, we do have more than 10 million searches happening on Guruji every month, and we are growing at a very rapid pace. We are also seeing huge interest in our regional language search capabilities. When we started, most of the regional language searches were experimental and were driven by the novelty value but today we are seeing utility queries around news, travel, blogs, entertainment being conducted. This is good news. Regional language search is a long term bet and we remain very optimistic about it.

How is Guruji different from say Google showing search results from Indian web pages?

I would like to take this opportunity and clarify that Guruji results are not about Indian web pages alone (as in hosted in India, or with .co.in), it is about content that Indians would want to search. We consider global sites like wikipedia or BBC as much relevant as any other “Indian site”. It is not about whether a site is being published in India or talks about India, it is about whether the information on the site is relevant to the Indian users. Generic search queries around symptoms of diabetes or bringing up your child can be very well met with global site content.

Coming back to your question, our value lies in relevancy. We feel that with the approach that we are taking and the focus that we have we will improve the quality of results from an Indian consumer point of view. With the Indian web usage set to expand, we are well positioned to deliver better results in terms of what the Indian consumer is looking for. We are a technology focussed company and always innovating to identify the problems that exist and delivering results on them. We were the first to launch the city search results along with out web results much before any of the global players (including Google) figured that out. Similarly with respect to cricket scores being part of web search or movie timings another thing that we were the first to launch it was innovation coming out of Guruji. We will continue to innovate around the peculiarities of the Indian search usage habits.

What would be the critical mass for the success of Guruji? By when do you see the website reaching that stage?

I think critical mass can be measured around several dimensions like adoption, product maturity, advertisers’ interest and so on. I think we are moving in the right direction and are on our way to acquire enough critical mass to be considered a serious search player. We believe we would be a formidable player in the next 12-18 months. Looking at what we have achieved in a short span of time in terms of product and adoption, especially against a well established giant, is a think to be happy about. We also realize that this is just the beginning and there are lots of challenges and potential achievements that lie ahead, and we continue to work hard.

Apart from placing more focus on Indian content and search capabilities in regional languages, how is Guruji different from a Google, Yahoo! or Live search?

I think points you mentioned are crucial differences and lead to significant incremental value. As I said earlier, it’s not about focus on Indian content alone but it is about focus on Indian search usage – which translates into what they search on, the way they search, their expectations from search results and so on. There is lots that can be done around these pivots to create a better search experience. Search capabilities in regional languages would emerge as a significant challenge and opportunity in the next few years. The local language play hasn’t surfaced yet in the Indian Internet space. We believe, there would be loads of action around it in the years to come, and we surely aspire to be the frontrunner.

What is the rationale behind adding regional search capabilities when most Indian Internet users already speak English? By when do you plan to add more languages and cities?

We are adding more languages and cities, as we speak we will be adding 2-3 more languages in the next couple of months and also expanding to 5-6 cities. Internet we believe would emerge as a mass medium and regional language content would be a key driver for the same. If you look at the evolution of other media forms – TV, print, radio – regional content has been the key force. The Internet experience in Indian languages is an underserved segment, and we at Guruji.com are gearing up to tap this opportunity.

What is Guruji’s value proposition, since the content is currently being sourced from Infomedia? Also what’s your strategy to face Google Local and Google Business?

Guruji city search is not only about content alone. Given a certain search requirement, understanding the search intent and creating an intent-content match is where we create value. To give you an example, if one searches for “Hotels Bangalore”, how do we figure out what top 10 be displayed first within the hundreds of hotels in Bangalore. You apply this scenario to various categories, suburbs, cities and you will begin to appreciate the complexity. What if you are searching for “key maker” in your locality and there are none available there, how do you figure out which is the closest key maker in a near by locality. The beauty of search as an application is that there are potentially infinite scenarios in which your product can get used, and designing a generic solution that handles them is where Guruji.com adds value.

Infomedia is one of our partners and we are also augmenting and refining our data through other means. Competition only pushes us harder and we are OK with Google following it’s own path.

What are the challenges of maintaining a search engine?

The challenges are extreme, indexing millions of pages and making sure that the millions of searches get served with the right results is a complex computer science problem that we are solving every day. It requires solving lots of engineering and science problems and we have a team of dedicated computer scientists from IIT and IISc’s that are up to the task.

How has your business experience been different from that in Bay Area?

It has been different in many ways and yet the way we have run it has been very similar to what we have seen there. We were always fascinated by the bay area in the way that start ups take on the giants and how the teams believe they can make a difference and eventually a lot of them do. In India we faced a lot of scepticism since there are not many product companies that have done well. But we are standing tall and making sure that we are counted as a product company that delivered on a difficult mission. Most of the Indian internet companies have relied more on the home advantages of knowing the market and distribution channels, rather than taking on pure technology challenges. We believe we are treading a different path by taking on possibly the hardest technical challenge. Our “Chak De” spirit is keeping us going and we really believe we can tackle this and make a difference.

Going forward, what are the features that you would like to see implemented in Guruji?

We have lots of things in the pipeline to better the Indian Search Experience. You would soon see them taking shape, please stay tuned.

Almost everybody seems to compare Guruji with Baidu. But Baidu was launched in a country where the predominant language was Chinese and not English, the forte of Google, whereas Guruji has been launched in a country where the predominant language, at least for the internet users, is English and not say Hindi, Tamil or Gujarati. What’s your comment on that?

I think one rule does not apply to all. In India we feel that even in English a lot of search intents can be served in better ways. So the opportunity exists in creating a better search for the English users from a different point of view. It was only after we launched some of the things that the global players cared to implement them here in India. So the real difference is the focus and commitment which we have for the Indian consumer.

How do you plan to reach millions of mobile internet users? Have you started some talks with the mobile operators in this regard?

The Mobile Internet space is a very interesting area and is yet to be defined fully even in developed internet markets. We believe Mobile Internet would have its own peculiarities, and it would not be as simple as porting the computer web to the mobile device. It would take much more than that. And then if you bring the Indian perspective, the mobile internet space becomes even more peculiar. We are watching this space closely. You can check out Guruji mobile by logging onto http://www.guruji.com on your mobile phones. The mobile internet space excites us. Still early days but some good things are ahead of us.