The first round of the battle in cyberspace saw Indian dotcoms lick their multinational rivals. The second round could throw up very different results.

Try this: Run a search on both Rediff.com and yahoo.co.in for a ''guide to photography''. Rediff will throw up 7,92,000 matches, and yahoo, 190 sites. The numbers aren't strictly comparable, so look at the content on the first page. Rediff's first match is bang on: ''A beginner's guide to photography''. And Yahoo's is ''Spearmint's Guide to Infrared Photography''. Sure, Yahoo's second match is perfect (Tim's Guide to Photography), but the sites it shows up towards the end of the first page are not very relevant.

That in a way is indicative of the lead that desi dotcoms have been able to maintain over their transnational rivals in India. Not only are the local cyber corporates drawing more eyeballs, they are pulling in more moolah too. For instance, Rediff racked up $1.51 million last quarter, followed by Sify.com ($0.70 million). Yahoo India would not reveal its revenue figures. In terms of page views, Rediff led the pack with a count of 965 million between January and March this year, and Sify reported 540 million page views in the same period. While yahoo gets about 650 million page views a month globally, India-specific figures were not made available to BT.

Competition is most fierce in the horizontal space, but the fight is intense in other segments too. Take, for example, online job searches. World No. 1 Monster.com, Jobstreet.com, Stepstone.com, and Jobsdb.com are pitted against Naukri.com and Jobsahead.com. In B2B, Freemarkets and Gate2biz are jockeying for leadership with Trade2gain, Sify, and Auctionindia (See Dotkings On the Desi Turf). Again, in each of these segments, it is the Indian dotcom that dominates. Naukri boasts of 400,000 resumes in its databank versus Monster India's 90,000; Trade2gain has conducted 238 auctions in six months whereas Freemarkets has done 100 although the average value of transaction is much higher in the latter's case. Says Ajit Balakrishnan, Chairman, Rediff: ''Being foreign-owned is no guarantee of local success.''

Now the war begins

Dotkings on the Desi Turf

1.	Domain		:	Horizontal
	Global Player		:	Yahoo, MSN
	Local Player		:	Rediff,Sify
	Key Success Factors
	1. Breaking News and Localising Content
	2. Speed of the Page Display
	3. Utilities Offered Apart from Plain Vanilla Stuff
	4. Adapting to changing Trends in e-shopping
2.	Domain		:	Jobs
	Global Player		:	Monster, Jobs DB
	Local Player		:	Naukri, Jobsahead
	Key Success Factors
	1. Extend reach beyond the Internet
	2. Range of Products apart from the regulars
	3. Brick and Mortar (Location-based or Print Offerings)
3.	Domain		:	B2B
	Global Player		:	Freemarkets
	Local Player		:	Trade2gain, Indiamart
	Key Success Factors
	1. Full-Fledged Corporate commitment
	2. Sustaining Capability (Deep Pockets)
	3. Technical Expertise for Complex Problems
	4. Leveraging Existing Relationships
4.	Domain		:	Search
	Global Player		:	Lycos 123, Altavista
	Local Player		:	Khoj, india.com
	Key Success Factors
	1. Speed of the Search Function
	2. Relevance of Result Displayed
5.	Domain		:	e-learning
	Global Player		:	Swiftforce
	Local Player		:	Learn at Satyam
	Key Success Factors
	1. Level of customization of the content
	2. Concept-selling to corporates
6.	Domain		:	e-trading
	Global Player		:	Tata-TDW
	Local Player		:	ICICI-Direct, Indiabulls
	Key Success Factors
	1. Credibility with Stock Market Customers
	2. Constant Product Innovation
	3. Understanding of Local Environment
	4. Backup Operations & Risk Management Ability

May be, but the current equation could change soon. Being late entrants, most of the foreign players have so far been busy getting their content right. But now they are moving up a gear. Yahoo India's initial revenue model depended on ads, but now it is focusing on selling e-solutions to corporates, co-branded tools, 'fusion marketing' (optimises targeting capabilities), 'delivers' (permission-based marketing), and webcasting. Explains Deepak Chandnani, CEO, Yahoo India: ''We have tailored our revenue streams to suit the local conditions.''

Monster India, on the other hand, is adding a brick-n-mortar dimension to its virtual strategy by opening three sales offices in India. Simultaneously, it is expanding its jobs portfolio to include segments such as finance, sales, media, and services. CommerceOne also has modified its global transaction software to suit peculiarities of Indian trade (adding tax and excise components to it).

By now it is clear to most dotcommers that to make money on the Net, companies will need to build strong offline capabilities. For example, in the B2B space, factors such as a strong partnership with participating companies, superior logistics service, customer service, and secure payment technology will decide who wins the game. In e-trading, consumer confidence, strong market participants (such as depositories), and scalability are critical issues.

To build such unique capabilities, the companies will need deep pockets. Here again, the Yahoos and Commerceones of the world have an edge over the Rediffs and Trade2gains. The difference in financial stamina will get accentuated especially when revenue cyclicality worsens. Then, the players must take a call on whether to cut back on key investments and risk missing market when it takes off, or continue spending and risk going bust. Monster (US), for instance, plans to spend $50 million on product development and enhancement during 2001. Yahoo India is continuing to invest in server farms and hiring people, although revenue is in no way keeping pace with the spend. Not many Indian dotcoms can claim to have a comparable hoard. Says Chandnani: ''We are using technology to make our user experience the best.''

Critics of the high-investment strategy, however, say that Indian dotcoms are being wiser by keeping their cash-burn low. Points out Sanjeev Bhikchandani, CEO, Naukri.com: ''Even if the market is buoyant you should not overspend on infrastructure or personnel.'' In the final analysis, the key to success will lie not in ownership but in dotcoms understanding local customer preferences and balancing their investments with returns.