Bogus: Zapak buys Sony Online Entertainment
ContentSutra pointed to a story in ET about Zapak acquiring Sony Online Entertainment (SOE) for $300 million. Just like Nikhil, I had my own doubts about the deal — $300 million is too small a price for a company making $150 million in revenues.
Its now reported that the rumor is bogus and is SOE has denied any such deal.
The ET story has since been taken down. Way to go ET !!
TravelGuru acquires Desiya for Rs 100 crore ($25 million)
The first major act of consolidation in the online travel portal industry in India. TravelGuru ($42 million revenue this fiscal) has acquired B2B hotel portal Desiya for $25 million (Rs 100 crores).
TravelGuru has raised $25 million in funding over two rounds.
via ETÂ
HT Media acquires DesiMartini - a few thoughts
While skimming through the Web 2.0 coverage I’d missed over the last month and a half, the HT Media - DesiMartini deal caught my attention. Simply put, I was astonished by the jaw-dropping < $10 million acquisition price - a sentiment echoed through the Indian blogosphere.
Why was HT Media shopping for a social networking site ?
Recently, HT Media has been very aggressive in the Internet space. Spun off their Internet properties under Firefly eventures, launched the online edition of Mint, their business paper, revamped the HindustanTimes website, ventured into online classifieds etc. Did the social networking fad catch the fancy of a HT Media exec or did they feel threatened by the aggressive push for BigAdda by Reliance ADAG ? Or do they just have an extra pile of cash lying around ? We wont know for sure what prompted HT Media to foray into the social networking scene.
Why DesiMartini ?
Assuming that HT Media was looking to acquire a social networking site, what options were out there in the market ? Yaari, DesiMartini, MingleBox, Fropper, BigAdda and IndyaRocks. BigAdda and Fropper are ruled out, considering that they are owned by ‘competitors’ (Reliance ADAG and People Interactive Pvt Ltd). Yaari appears way beyond defunct to me. Minglebox valuation would be way higher considering that they got a $7 mill Sequoia funding. So, the only options that remain are DesiMartini and IndyaRocks. While it is unknown if HT Media approached IndyaRocks, the price tag for IndyaRocks would definitely be higher than DesiMartini, considering that the former gets ~10 million pageviews as opposed to the latter’s ~2.5 million. That leaves DesiMartini as the only cheap, viable option out there (this is what I think - differing opinions welcome).
The acquisition price
While the price was quoted as a vague “less than $10 million” in most of the media, Vivek Pahwa, DesiMartini founder, clarified that the acquisition price was “significantly less” than $10 million. Considering that Vivek is now doing seed investments of less than $200K in other Internet startups, I’m taking the liberty to assume that probably the acquisition price was in the $2.5 million range (just a hunch).
With a user base of 250,000, this puts the valuation at $10 per user (a higher acquisition price and this valuation would jump even more). Compare this to $21 per user that Fox paid to acquire Myspace (27 million unique visitors at time of deal). Digg, with a user base of 18 million, would make $16.30 per user if acquired for $300 million.
That makes you wonder (and evokes the jaw dropping reaction) — is the HT Media - DesiMartini deal for real ? DesiMartini is a shabby, half-ass, semi-defunct rip-off. Does it make sense to even cough up $1 million for it ? Wouldnt it be a better idea (and way cheaper) to build your own social networking site ? And leverage your existing channels (print, web, radio) to market it ? The argument of getting a direct entry by acquiring an existing player doesnt fit too well with me either. HT Media wasnt in a Microsoft-like deparate scenario, where they were so late to the game that they had to cough up a premium to gain entry.
All in all, either Vivek is a really smart entrepreneur and/or someone was asleep/clueless at the helm over at HT Media.
So, what does this deal mean for the Indian Web 2.0 scene ?
Whether this acquisition sets off a trend among other media houses (ABP, MidDay, IndiaTimes etc.) remains to be seen. If it happens, it would definitely be good for the other Indian social networking sites out there - who, otherwise lack a viable exit strategy. This in turn could garner some mainstream attention for the Web 2.0 scene in India.
Reliance ADAG in talks to buy out Seventymm ?
Matrix Partners backed Seventymm announced in June that they had acquired 100% stake in another online DVD rental player, Madhouse.
Now, LiveMint reports that Seventymm may very well be on way to be acquired by an even bigger fish - Reliance Entertainment Ltd., a part of the Anil Dhirubhai Ambani Group (ADAG). As per the story, two senior execs at R-ADAG and Seventymm said that negotiations were at an advanced stage. With 25,000 customers and 15,000 titles, a Seventymm acquisition gives R-ADAG a direct entry into the DVD rental business.
R-ADAG also recently launched their own entertainment portal, BigFlicks. I guess Seventymm assets would complement the online, entertainment on-demand portal ?
Google acquires stake in Chinese social networking site Tianya.cn
Ok..Not related to the Indian market, but definitely a high impact news - Google, who’s China efforts have been less than stellar thus far, has acquired an undisclosed stake in Chinese social network site - Tianya.cn. Various media reports put the stake anywhere between 10 - 60 %.
Google, which comes a distant second to the Chinese search engine Baidu.com, has been playing catchup in the Chinese market and has recently ramped up its efforts to make headway in China, which is now the worlds second biggest internet market (~162 million internet users) after the US.
via Reuters
160 exits for VC / PE funds between 2004 - 2007
Venture Capital (VC) and Private Equity (PE) investors have invested close to $17 billion in 706 companies in India between January 2004 - June 2007. Of these, they have exited from 160 companies either through IPOs or M&A.
And majority of the exits have been successful, as per Arun Natrajan, founder of Venture Intelligence. As per his estimates, there are about 100 active players in the market with 30-35 VCs and about 60 private equity investors.
via Asian AgeÂ
Reliance Communications plans largest wireless network in the world
Close on the heels of the Yipes acquisition, Rediff has a story on Reliance Communications’ ambitions and grand plans for a global footprint.
- Goal to become the world’s single largest wireless network by year end
- 16,000 Crores will be invested for network expansion in FY08
- The company will cover 23,000 towns
- DTH network will be launched by end of year
FLAG Telecom has reported profits for the first time and plans are to expand from 40 to 60 countries. The Yipes brand will be going global leveraging the FLAG network.
Several other tidbits in the rest of the story.
Barrons crashes Rediff party
ContentSutra writes about a latest story on Barrons on how market valuations for Rediff and Sify are way out of whack.
In a world mad for Internet stocks, some of the maddest valuations have gone to two Internet companies in India that trade on Nasdaq, Rediff.com India (ticker: REDF), India’s third largest portal, and Sify (SIFY), India’s largest nongovernment-owned provider of broadband access.
The report seems to be a direct outcome of the sharp increase in Rediff’s stock price due to the acquisition rumors by Yahoo / Google.
I think Rediff would make an ideal buy for AOL India or MSN India as opposed to Yahoo / Google. If the public perception and Comscore metrics are any testaments, Yahoo and Google are already more popular and get more pageviews than Rediff.
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