Rediff plans series of acquisitions to stay on top
Business Standard, (Reuters), July 20, 2000

After a successful listing in the US Nasdaq market in June, Indian Internet portal Rediff.com is planning a series of acquisitions to maintain its leading position in the domestic market, its chairman said yesterday.

"We are looking to acquire one firms in the US which is an Internet website with strong content offering and communities," Ajit Balakrishnan said in a telephone interview from New York.

"The acquisition will give us a good management team in the US and help us grow internationally," he said.

Rediff registered page views of 109 million in June, ahead of the 80 million page views of diversified Indian Internet firm and the biggest private Internet service provider, Satyam Infoway Ltd.

"The adaptation we are making is to take note to our big US market," Balakrishnan said. The portal which targets Indians worldwide gets about 30 per cent of its page views from the US.

He said Rediff is likely to complete the acquisition in the current quarter.

Rediff, launched five years ago with a first-mover advantage, provides news and chat on everything from cricket to finance films and astrology.

Armed with over $64 million in cash and the US listing giving it the opportunity to offer stock options, Balakrishnan said Rediff is also eyeing possible takeovers of Indian portals.

Analysts expect the recent launch of local portals of global leaders Yahoo! Inc and Alta Vista to intensify the battle to attract eyeballs in a crowded Indian market.

The chief executive officer of Internet portal company Lycos Inc's Asian arm, which launched its Indian portal this week said yesterday it is open to acquiring local portals with solid content.

"There is an opportunity to make investments in very attractive start-up sites or local portals or vortals," said Balakrishnan, who is also the founder of Rediff.

Earlier this year, Rediff picked up a stake in FootForward.com, a portal for women. He said the mushrooming of local portals, many of which could be finding the going tough as advertising revenues and e-commerce run short of expectations, presented Rediff with investment opportunities.

"Many of them have some degrees of questions attached to future funding. There are several segments of vortals that we would be aiming for," Balakrishnan said. He did not elaborate.

Yesterday morning, Rediff's shares traded $0-3/8 down at $15 in a weak Nasdaq market. The ADR which listed at $22 on its first day of trading on June 14, is below its record $28. The ADR is however trading above its offer price of $12. Rediff on Monday reported a net loss of $2.87 million in the first quarter ended June 30 against a net loss of $2.92 million in the previous quarter.

The portal's revenues grew 53 per cent to $873,000 in the quarter ended June compared to the earlier quarter.