Rediff - Will it Survive the Dotcom Bust?
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Case Details:
Case Code : BSTR010
Case Length : 7 Pages
Period : 1995 - 2001
Organization : Rediff
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Media, Entertainment, and Gaming
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"I don't see any change in the next 5 years. I see Rediff only as a portal. We hope to be India's No 1portal. We don't want to become a niche player."
- Ajit Balakrishnan, CEO, Rediff.com
Introduction
In 2000-01, when most of the dotcoms were going bust, Rediff.com (Rediff) continued to tick.
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Rediff's business included a portal service covering all subjects related to India; content via news and features; free e-mail, chat sites, homepages; and on-line retailing of books, music, and travel services.
Rediff was the first independent Indian dotcom to get listed on the National Association of Software Dealers Automated Quotation (NASDAQ).1 Ajit Balakrishnan, CEO of Rediff, was confident that Rediff's e-commerce transactions would see an increase and would form the bulk of its revenues.2
Rediff was diversifying its revenue flow and had taken steps to increase its offline revenues.
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It had acquired Value Communications, and India Abroad, both US based companies. In years to come, Rediff's
business was expected to evolve along four clear paths: media services (online
and offline advertising), consumer subscription services (India Abroad),
communication services (Value Communications) and merchandising services
(e-commerce).
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However, its performance would depend a lot on its ability to integrate the newly acquired companies. Analysts felt that Rediff was one of the few dotcom companies that had all that it takes to make profits. However, in the fiscal 2000-01, Rediff recorded a net loss of $6.39 mn, which was marginally better than the $6.67 mn loss made in 1999-00. Though revenues went up from $1.91 mn (1999-00) to $5.60 mn (2000-01), the performance for the quarter ending March 2001 was disappointing. Revenue was down by 35% as compared to the corresponding period in 1999-00. Rediff's advertising revenues also fell from $1.59 million for the quarter ended December 31, 2000 to $1.33 mn for the quarter ended March 31, 2001. |
Rediff - Will it Survive the Dotcom Bust?
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