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ONCE bitten, twice shy. The phrase is more than accurate for dotcom companies, which witnessed a boom in the late 1990’s and a subsequent bust thereafter. Having been hurt the first time around, portals are now more cautions in terms of their business model, which is not rooted in attracting only eyeballs but in earning revenues and brand building as well. Going by the spends on advertising in the first half of this year, dotcoms are certainly not focusing on valuations and quick exists alone, as e-commerce slowly becomes a realty in India. They are here for the long haul. Industry observes feel that launching public issues could be another reason for increased focus on creating brand awareness. It wouldn’t therefore be far fetched to say that circa 2006 looks at kick starting the second phase of the dotcom era. Sample this-according to TAM-ADEX, in the first half of 2006, dotcom companies spent around Rs.30 crore across TV, press and radio as against a total of Rs.34 crore during 2005 and Rs.24 crore in 2004.
In addition there has been quite a few VC and PE funding in these Indian portals, which could be one of the reasons for such a spurt in ad monies. Industry observes feel that this time around its not free play for these online portals as VCs have a stronger reign. “Most dotcom companies are looking at equity creation because it’s about creation of valuation, “says V Ramani, CEO, Mediaturf, an internet marketing and CRM company. According to Mr. Ramani, the VC’s are calling the shots on any kind of investments unlike the earlier dotcom phase when it was a free play for the companies. Softbank Asia Infrastructure Fund (SAIF) Partners, is one such venture capital player, which has invested in makemytrip.com and IL&FS Investment’s online brokerage. Says Vibhor Mehra, VP, SAIF Partners: “With increase in broadband penetration and proliferation of credit & debit cards as compared to the 90’s when e-commerce was not supportably by enabling infrastructure, we are looking at the start of genuine e-commerce.” The hottest sectors in the online market according to him are stock trading, jobs travel, dating, matrimonial sites and online shopping portals.
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| Online Portals | 2004 | 2006 (till June) |
| TV | 140 | 137 |
| Press | 78 | 147 |
| Radio | 22 | 21 |
And it’s not only the companies, which have a viable business that are participating in brand building endeavors. New players are equally a part of this ongoing campaign to bombard mass media and other platforms. “These companies are probably seeding the market and trying to grow the entire online space, “says Mohit Hira, director Times Internet. As the dotcom business gains financial viability, brand creation is becoming important for companies and that is being facilitated by outside investments. “Due to increased participation of VCs there is more money in the market and that’s being channelised in brand building efforts. Besides as the online market grows new start ups are filling the space after the still born first phase, “says Sanjeev Bikhchandani , CEO of naukri.com. Players in the online space feel that with a decent population of internet users, the Indian market is finally gearing up for a dotcom growth stories. “The huge spurt in advertising both online and mass media is being seen as an investment phase, the returns of which will not come immediately, says Deep Kalra, CEO & founder, makemytrip.com.