Bangalore: Yahoo Inc. has launched a service to build and host websites for small and medium enterprises (SMEs) in India for a fee, as the Internet company aims to attract more users online to earn a higher income from local advertisements.
Local firms such as Rediff.com India Ltd and Net4India Ltd already offer such a service, called Web-hosting solutions in India, a market dominated by small outfits such as Bangalore-based Webtrust Solutions. Most of these small outfits offer customized services to clients and operate on personal relations with customers. India is the second country in which Yahoo is offering this service after its home market, the US.
Yahoo, which calls its service small business solutions, says it aims to be a “one-stop shop” for firms going online to choose domain name or address on the Internet, providing 5 gigabytes of hosting space and 200 customized email addresses, in addition to Rs250 worth free ad space or clicks on its search engine.
“The Indian online market is still in its infancy and there are lots of local firms who are not yet online,” says Jeff Kindler, senior vice-president for small business and recruitment advertising at Yahoo.
“The free ads help them get visibility online,” he added.
There are about 1.7 million organizations that can be classified as SMEs in India and they spend about Rs3,400 crore on IT products and services every year, according to technology researcher International Data Corp.
Yahoo is offering the service at Rs999 a year. Webtrust Solutions offers a similar service at Rs3,250. Rivals, however, feel that Yahoo’s pricing is a promotional offer.
“The market will expand… awareness will increase due to Yahoo investing in branding and it is good for all of us,” says Jasjit Singh Sawhney, founder and chief executive of Net4India.
India has around 486,000 domains or Internet addresses, according to Webhosting.Info, an Internet research firm.
Webtrust Solutions says customers will still prefer it. “If I get a call at midnight, I am there. That you cannot expect from a big Internet company,” said Jobish Augustine, partner at Webtrust, a three-year-old company.
Yahoo plans to use resellers or computer vendors in small towns to get more firms online. “They will reach out and bring customers on to our platform,” said Sandeep Deshpande, general manager for online and small business at Yahoo Web Services India Pvt. Ltd.
Rediff, India’s largest Internet firm by users, says it hosts more websites of small firms brought in by resellers than on its own. “So resellers will continue to sell and add value to the SME by providing them a complete solution rather just hosting service,” said Uday Sodhi, vice-president for subscription of Rediff.com.