Leading online news and entertainment company Rediff.com India Ltd, which has 59 million registered users worldwide, is joining the social networking bandwagon by incorporating the concept into its video sharing platform, iShare, launched in July.
“We hope to introduce social networking features on iShare in the next 10 days,” said Ajit Balakrishnan, chairman and chief executive officer, Rediff.com. “Social networking is an interesting phenomenon in the online space. It will, in fact, have to be morphed into every online initiative,” he added.
According to the India Online Report 2007, 44% of online traffic is using the Internet just for social networking. With its social networking initiative, Rediff aims to get a slice of the space in India, which is largely dominated by global players such as Orkut, YouTube, My-Space, hi5 and Facebook.
“Video sharing being the most popular exercise among Net users, we decided to enter this space first. Now, having bolstered our presence there, we plan to extend the platform for social networking,” said Balakrishnan.
According to him, both features—video sharing and social networking—combined into one will help in building and retaining consumer traffic.
Quoting ComScore, a survey and research company, Bala-krishnan said iShare gets one million viewers a day and has a registered user-base of about six million. But the company has not been able to attract much attention from advertisers. In the three months since its launch, it has managed to get only Airtel as an advertiser. It had also tied up with Zee TV’s singing talent hunt show, Sa Re Ga Ma Pa, but it was largely a marketing initiative with no revenue generation.
However, Balakrishnan says advertising revenue will follow once the website is able to aggregate enough consumers. “Nobody has made money on social networking so far. Nobody knows how to go about it,” he said. “But when 10 million people congregate, somewhere down the line the company will make money, and it will be advertiser related.”
Market observers, however, feel that Rediff is not only late in entering the social networking space, but may have also lost the opportunity to monetize any such initiative.
“Social networking will never reach its full potential in India. It could have been profitable three years ago, but now there are too many players and not one has established a strong user base,” said Mahesh Murthy, chief executive, Pinstorm, an online marketing and advertising firm.
Experts said that with more players offering the same kinds of services and in largely similar formats and environments, advertisers may find it difficult to associate with one website.
The social networking space in India has seen a lot of action recently. Along with global platforms, many Indian companies have also launched their networking sites, including BigAdda.com, Yaari.com, Desimartini.com and Minglebox.com.
But, Balakrishnan says, 80% of the market will still be dominated by three big players. “That’s how the market works everywhere. In India, the online space will continue to be dominated by three big players—Google, Yahoo and Rediff. The rest will be shared by others,” he said. Rediff claims to have 45% share of the approximately 35 million active consumers in the online space.