AOL looks at niche acquisitions to jump-start India operations

AOL looks at niche acquisitions to jump-start India operations
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First Published: Thu, Apr 26 2007. 10 59 PM IST
Updated: Thu, Apr 26 2007. 10 59 PM IST
By Pankaj Mishra
pankaj.m@livemint.com
Bangalore: Time Warner Inc.’s $7.9 billion (Rs32,390 crore) Internet services arm, AOL, which launched an Indian English-language portal on Friday, said it will look for acquisitions here and launch local versions of its portal in Asia as part of a strategy to seek growth in emerging markets.
This is the first time AOL has launched a local portal (www.aol.in) anywhere outside the US and Europe, its traditional home markets. To make it more appealing to local users, it will work on its portal in Indian languages.
Rival Internet firm Yahoo Inc. said on Thursday that it had made India the centre for building Internet and mobile products for new markets such as Vietnam and Brazil
The Indian edition of AOL’s portal is just the beginning, “as the company prepares more roll-outs in other Asian countries,” AOL president and chief operating officer Ron Grant said in an interview. “We would be looking at firms specializing in communication, social networking and other niche technologies,” he added, but declined to provide additional details.
With the Indian market already teeming with players, such as Google Inc., MSN of Microsoft Corp. and Rediff.com India Ltd, a delayed entry almost forces AOL to make acquisitions, says one analyst. “Having entered late into the market, AOL does not have much of a choice,” said Madan Mohan Rao, research director at the Asian Media Information and Communication Center. Possible targets could be Indian portals, such as India-focused community portal Sulekha.com and Indiainfo.com, he predicted.
AOL announced last year that it would offer its email and other services free of charge to its subscribers in the US and Europe. Users of its Indian site, too, would not be charged. “Of all the growth opportunities we evaluated, India is on top priority for us, and it is going to play an essential role,” said Grant, who led AOL’s global restructuring along with chief executive Randy Falco last year. India also became the first geographic market to get the next version of AOL’s email service, which allows better integration with instant messaging services and enhanced mobility features, such as access through Blackberry devices, compared with previous versions.
Did AOL leave it too late to enter India? “I do not think so, especially because with only 45 million of around 1.1 billion total population hooked on to the Internet, this market is too big,” Grant said. The number of Internet users here is expected to climb to 147 million by 2010, he said, quoting research from Kaufmann Brothers.
AOL had started restructuring its business models in late 2006 and “took a very long, hard look at the existing services for realigning them according to the changing dynamics,” Grant said. “We now have an aggressive expansion plan in place, and you will see AOL in many international markets going forward.”
While AOL will stay away from being an Internet service provider (ISP), it will “partner with the local ISPs for offering content and other value-added services,” said Grant.
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First Published: Thu, Apr 26 2007. 10 59 PM IST
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