Mumbai: If the first dot-com boom helped Sabeer Bhatia make millions by selling the free Web-based email service Hotmail to Microsoft Corp., and Rajesh Jain make a small fortune selling his India World portal to Sify Technologies Ltd, the Web 2.0 explosion of social media companies is helping some Indian entrepreneurs harness the power of, and make money from, the Internet once again.
Just last month, the world’s largest social media website Facebook acquired Indian entrepreneur Abheek Anand’s start-up Tagtile for an undisclosed sum, days after it bought photo-sharing service Instagram for $1 billion (around Rs 5,370 crore today).
Presentations matter: Rashmi Sinha, SlideShare’s CEO and one of its three co-founders.
On 3 May, the world’s largest professional network on the Internet, LinkedIn—with 161 million members worldwide—said it agreed to acquire SlideShare Inc., a leading professional content-sharing community that was co-founded by two Indians: Rashmi Sinha, its chief executive officer (CEO), who focuses on product strategy and design; and Amit Ranjan, its Delhi-based chief operating officer, who focuses on product management, content and community. Jonathan Boutelle is the third co-founder and chief technology officer of SlideShare.
Founded in October 2006, SlideShare users, according to a company statement, have uploaded more than nine million presentations. According to comScore Inc., in March, SlideShare had nearly 29 million unique visitors, ranking it among the most heavily visited sites for professional content.
“Presentations are one of the main ways in which professionals capture and share their experiences and knowledge, which in turn helps shape their professional identity,” LinkedIn CEO Jeff Weiner said in a statement, explaining why SlideShare’s business aligns “perfectly with LinkedIn’s mission and (is) helping us deliver even more value for our members”.
The transaction is valued at around $118.75 million (subject to adjustment). It will be a combination of around 45% cash and 55% stock. The acquisition is expected to close during the April-June quarter.
“We built SlideShare to help professionals share presentations and connect people through content,” CEO Sinha said in a release. “What we can build with LinkedIn, the largest professional network on the Internet, is the most natural extension of this vision.”
Before co-founding SlideShare, Sinha built MindCanvas, a game-like survey platform for customer research. She has a PhD in cognitive neuropsychology from Brown University and conducted research on search engines and recommender systems at the University of California, Berkeley. She was recently named among the world’s top 10 women influencers in Web 2.0 by US magazine Fast Company.
Ranjan is an engineer-turned-marketer-turned-entrepreneur. Before SlideShare, he had a career in consumer goods marketing and sales. His previous employers include PepsiCo Inc., Asian Paints Ltd and Godrej. Ranjan has an MBA from the Faculty of Management Studies, Delhi, and a mechanical engineering degree from the National Institute of Technology, Jaipur.
Digital media experts in India say the deal is good for both companies, but challenges remain.
“SlideShare matched LinkedIn in its key user demographic—the 35-44 age group—and its usage for business presentations,” said Mahesh Murthy, founder and CEO of digital marketing firm Pinstorm and co-founder of venture capital fund Seedfund. “SlideShare also added about 25% more users to LinkedIn, not counting for duplication... It’s a good, cheap deal for LinkedIn. Of course, I wait to see how they’re able to monetize it in more interesting ways.”
He added that the challenge for social networks is monetization, and “here, Google Inc. is the leader with about $40 in revenues per user per year. Facebook lags with about $4 per user per year, and LinkedIn also lags with about $7 in revenues per user per year”.
“This is a good deal for both companies (LinkedIn and SlideShare),” agreed social media strategist Hareesh Tibrewala, joint CEO of SocialWavelength.com, a digital media firm.
He reasoned that “LinkedIn has established itself in the thought leadership arena (and) has a business-to-business connect along with its consumer connect. Hence, SlideShare is a proper match since both companies have a similar target group”.
The use of social networks has exploded globally and in India. LinkedIn has around 14 million users in India, and gets around 33% of its revenue from outside the US. Facebook has around 50 million users in the country, and more than 900 million globally.
“The need to stay in touch with friends and loved ones is the main reason pushing the users onto the Internet bandwagon. The proliferation of social networking is another reason which can be attributed to the increased heaviness of usage,” said a 2011 report by the Internet and Mobile Association of India.
Social networks now account for more than 25% of the overall time spent by users online globally, against an insignificant share in 2005, according to a November 2011 report by Avendus Capital Inc. “Portals have been one of the biggest losers in this. Such a shift has been witnessed in India, too, with the time spent on Facebook shooting up to around 22% of the overall time spent online in India in May 2011,” the report said.