Rediff On International Acquisition Spree

Rediff.com is on an acquisition spree and is planning to buy out portals in the United States, United Kingdom, West Asia and Southeast Asian countries, specifically in Singapore and Malaysia. Speaking to Business Standard yesterday Ajit Balakrishnan, chairman and chief executive officer of Rediff.com India Ltd, said: "We have decided to expand internationally by going in for acquisition of portals in the US, UK, West Asia and Southeast Asia where there is a sizeable Indian population." India's largest dotcom has already identified a portal in the US and the deal will be finalised in the next 10 days. The company has earmarked one third of the $75 million that it has raised through the American Depository Share for acquisitions. The foreign acquisitions, according to the gameplan, will be completed by March 2001 which envisages small dotcoms having good management and talented people. The portal is also scouting for technology companies in India and abroad which will provide a cutting edge to it and in the future will go for a domestic IPO. According to Balakrishnan, "We will buy portals which address the needs of Indians staying in these (foreign) countries." The acquisition route, he pointed out, will enable Rediff.com to decrease the time taken for setting up bases abroad by six to nine months. "The ultimate objective is to make Rediff.com the site which Indians all over the world use for their communication, information and shopping needs on the net," Balakrishnan explained. The proposed companies abroad will become fully owned subsidiaries of Rediff.com India Ltd. Rediff.com is also going in for alliances with cable operators as well as Internet service providers all over the country for distribution of the portal. For instance, it is talking to the Hindujas-owned Incablenet, Zee's SitiCable and Rajan Raheja's Hathway which run cable networks. It has already struck an alliance with Rolta Net, a Mumbai-based ISP. Balakrishnan pointed out that Rediff.com gets 25 million page views and 500,000 unique visitors in the US. In India, the site gets 110 million page views every month. At the moment, as much as 70 per cent of the viewers of the Rediff.com site comes from India, 25 per cent from the US and the remaining portion from rest of the world. Balakrishnan said in the next two to three years this ratio will change with 60 per cent of the viewers coming from India and the remaining portion from the rest of the world. But in the long term with dramatic increase in domestic usage of the Net 99 per cent of the portal viewership will come from India, he added. Rediff.com, however, does foresee need for additional infusion of capital for the time being and expects to break even and make profits from the middle of next year. Balakrishnan admitted that the price of the ADS issue is hovering at the issue price, but pointed out that analysts expect it to go up to $27 a share by the end of March next year.