Investors eye social networking sites, Minglebox gets funding

Investors eye social networking sites, Minglebox gets funding
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First Published: Thu, May 03 2007. 12 30 AM IST
Updated: Thu, May 03 2007. 12 30 AM IST
Bangalore: Indian social networking websites—Internet destinations that allow users to build and join communities of interest—are beginning to attract investor attention with start-ups Minglebox.com, Ibibo.com, Desimartini.com, and Yaari.com building online user bases frenziedly focusing on generating content that’s relevant for a local audience.
One of them has secured its first round of funding. Minglebox Communications Pvt. Ltd, a social networking site that has built a large community among college students, has got $7 million (Rs28.7 crore), funding from Sequoia Capital India, the local subsidiary of the Silicon Valley private equity and venture capital firm that made investments in Yahoo and Google. The amount will be disbursed in installments.
Minglebox, which says it has several thousand users, is the first social networking site among the 10 Internet companies, including local search engine Guruji.com, that Sequoia invested in India. None of the other Indian social networking sites have been funded yet.
There is no accurate count of users on social networking sites in India, but analysts estimate that about six million from the country are users on Orkut, the social networking service owned by Google.
A Google India spokesperson, Roli Agarwal, declined to confirm the number.
“Social networking sites are experiencing exponential growth worldwide and we are very happy with the response Orkut is getting in India,” Agarwal said in an email.
Orkut’s India following is indicative of the interest in social networking sites “and since it is, till now, primarily driven by youth and new users, this base would grow rather rapidly,” said Subho Ray, president of the Internet and Mobile Association of India, based in Mumbai. The body, which tracks Internet usage and online advertising in the country, estimates India’s online population to cross the 100 million mark by March 2008, up from about 38 million now.
Fropper.com, which initially started as an online dating site, is the oldest social networking service in the country. But in the last one year, sites such as Yaari.com, Humsubka.com and Desimartini.com have begun offering local content related to education, career and Hindi and local cinema, besides services such as messaging, photo sharing and blogging, with an aim to retain users for more time than on conventional websites.
Most social networking sites aim at building a base of millions of users and have content that lure them to spend more time on their sites. They expect to then “monetize” the user base to earn revenue through advertisements. India’s online advertising business for the year ended March was Rs218 crore and is estimated to grow to more than Rs2,050 crore in the next five years, said Kavita Iyer, chief executive of Minglebox.com.
Several of the social networking sites eye exits selling to larger Internet and media companies such as Google or Yahoo. In the US, Yahoo bought photo-sharing site Flickr.com in 2005. Google paid $1.65 billion to buy Youtube, a site that allows users to share videos. “The trend is written on the wall. There is potential in the Internet space and it is still so early in India,” said Iyer. The website went online in October.
One industry observer predicted that just a few social networking sites that constantly innovate and differentiate with better user content would survive in the longer run. “Most sites are either for dating or for friendship.  It is almost the same in their offerings,” said Amit Agarwal, a blogger in Agra who tracks technology trends in his popular blog, Digital Inspiration.
“I really don’t know how many people can take a leadership position in the industry,” said Vivek Pahwa, the 25 year old founder of desimartini.com, a networking site that aims to have a user base of four lakh by April-end.
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First Published: Thu, May 03 2007. 12 30 AM IST
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