Rediff Quaterly, Annual Earnings

Ok. I’m not going to rehash the numbers about Rediff’s latest earnings report. If you want, you can view their release here and their entire earnings report here (Doc file).

Instead, I’m going to highlight some of the interesting questions asked by the analysts present at the earnings call.

Analyst:

In terms of the advertising formats that currently very popular in India, do you continue to see banner advertising as a dominant format? And any progress on any other formats if you can talk to sort of what you think would be big, whether it’s contextual or behavioral search? Anything?

Ajit Balakrishnan:

OK, the first one, the banner versus performance based is exactly half and half approximately, OK? Apart from that, I think there the growth in the market is being driven by performance based advertising. It’s related in the formal text based ads or (inaudible) ads, both exist, but both are being paid for based on performance.

Most of the performance still is click-based, but there is a counteraction increasing trend towards results based in forms that are completed or lead to other things. That’s a smart beginning trend that there’s some clarity that that trend is going to increase. So where search based advertising is concerned, clearly in the domestic market, our impression is that it is relatively small still, largely because the number of e-commerce…they still remain miniscule.

So, the result is that there aren’t that many buyers or clicks from that sector, the e-commerce sector. The largest number of click buyers tends to be from the job sites, the matrimonial sites, and increasingly, the travel portals. Four or five of them have started. It’s a starting trend, and we have some strong offerings within that.

We drive a significant sentence of our revenue from that kind of advertising, with search based. I think the travel search that we have is one of the leaders in that category. So really we have a job search, these two are favorites, and are starting to pick up quite well.

Analyst:

So what’s driving the online advertising segment and the online US, both showing dramatic year-over-year growth. How much of this is added (inaudible) increase and how much of this is pricing increase?

Joy Basu:

I think that there will be no significant price increase during this quarter, so I think most of it comes from volume.

Analyst:

So, is it fair to say that the 92% year over year, is that volume, is that traffic quote or is that actual increasing number of ads you’re hosting on your pages?

Joy Basu

Both, it could be a function of both. But basically I think the underlying driver would be the unique users and page views that they consume and the number of adds per page. Also you have growth.

Analyst:

And then on Indian advertising on the same breakdown, in the release you said online advertising in India grew 92% year over year. Would that mean that the advertising sub segment with the India online advertising is about $5 million and the rest is e-based?

Joy Basu

Yes. $5.01 million is Indian advertising, and Indian revenues are $1.29 million, making a total of $6.3 million dollars.

For the transcript of the rest of the earnings calls, see here.

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