By Vipin Agnihotri
In terms of statistic, Rediff has 59.8 million registered users. What’s more, it also leads in page views. In the last quarter, revenue of Rediff grew 18 per cent but still all is not well at the India’s best-known Internet Company, Rediff.com.
In my opinion, risks such as competition, pricing pressure, client concentration, and a slowdown in online advertising is creating quite a headache for Rediff as their ad revenue share is bound to dip. Most of the experts is of the opinion that search is eating into the overall pie and is minimizing Rediff’s addressable market.
Some of you may argue that Rediff’s unique users grew by 9 per cent during the July-September quarter but the fact of the matter is that over the same period, Google and Yahoo grew unique users by 9 per cent and 6 per cent respectively.
Point to be noted here is that online advertising accounts for 1.8 per cent of total advertising spend and will increase to 3.1 per cent this year, pivotal factor here is that the overall share of display advertising is not going to increase that much. On the other hand, search advertising is going to expand a lot in the coming years.
Search advertising was more or less non-existent in India until 2004. But all changed when Google launched its India sales team in 2004, and its search advertising at this moment of time contributes to 42 per cent of online advertising. And that is where Google scores over Rediff because more than 90 per cent of search revenue in India goes to Google.
At present, the rising Internet tide is carrying Rediff, which reported revenues of $7.9 million (an increase of 18 per cent) for the July-September quarter but this is not going to last forever. Therefore, it is of paramount importance that Rediff give a solid reply to Google’s search-based advertising.
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