Rediff.com, the leading India-focused Internet portal which on Wednesday reported income surged 31 percent last quarter, does not foresee a slowdown in advertising revenue.

In fact, its chairman says the U.S. Nasdaq-listed company expects to turn profitable within the year.

Yet should it need it, the India-headquartered company also has $57 million in cash, enough to finance another decade of operations at its current "burn rate," chairman Ajit Balakrishnan indicated during an interview with Reuters from New York late Wednesday.

"Our cash burn in the last quarter was $1.5 million and we have $57 million in the bag, so that should see us through several years," Balakrishnan said.

Rediff.com's cash burn rate — a closely watched figure at money-losing companies since it indicates how long they can operate without going bust — has slowed from $1 million per month previously.

On Wednesday, Rediff.com reported that revenue jumped in October-December, and its operational loss per American Depositary Receipt fell 24 percent from the previous quarter.

It also said pageviews soared to 670 million during the period, up 69 percent from the previous quarter, even as marketing expenses dropped 21.5 percent. The pageview number is closely watched as it strongly influences the advertising rates a portal can charge.

Radically different

Balakrishnan said the Indian on-line market situation was radically different from the United States.

Global portal Yahoo! Inc and Sina.com have both warned of a bleak business outlook because advertising revenues were likely to shrink as many dot-com advertisers go out of business.

"But in India, we are in a nascent market. People are just getting into the Internet space," he said.

Rediff.com, which collects 30 percent of its advertising revenue from dotcom companies, is seeing a rise in Internet advertising by brick and mortar companies, Balakrishnan said.

"People like Hindustan Lever Ltd and Coke are setting aside amounts for advertising on the Net for the first time," he said.

Planning to focus on e-commerce revenue

Balakrishnan also said Rediff was working on increasing its revenue from electronic commerce, instead of just chasing eyeballs.

Advertising revenue contributed 90.6 percent to total revenue in the October-December quarter and e-commerce the rest.

"In the next 4-5 years the whole equation will reverse. Ninety percent will be from e-commerce and 10 percent from advertising," he said.

Rediff.com, which acquired two portals last year, continues to scout for acquisitions to enhance its product, he said.

Its website offers comprehensive content aimed at Indians both in India and abroad and offers e-mail, online shopping and a search facility.

Though a leader in the Indian Internet portal space, Rediff.com is facing serious competition from some international and domestic portals, Balakrishnan said, mentioning Yahoo!, MSN, Lycos and Altavista in particular.

Satyam Infoway, the only other Indian Internet firm besides Rediff.com listed on the Nasdaq, is also a stiff competitor, as are 123india.com, indiatimes.com and indya.com. Rediff.com raised about $55 million through an initial public offering in the United States in June last year.

Its ADRs closed at $3 -- after the result on Wednesday, up $0-½ over the previous day.