Archive for India

Internet trends in India 2010

Wonderful presentation by Vikram. I am assuming  he collected data from multiple sources and cleaned  it well. Compiling reliable data in India is a pain due to lack of a reliable central agency and closed nature of indian businesses. Anyway, I am not expecting anyone to extrapolate stats from single source. Loved the presentation  style and format.

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Interview with Sridhar Vembu, CEO of Zoho

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Unpluggd: Calling all entrepreneurs

Hi all,

It gives me immense pleasure in inviting you to the UNPLUGGD event, a freshly brewed startup event focused on ‘entrepreneurs in the trenches’.

By now, you must have heard statements like:

“Consumer Internet is just not happening in India.”

OR

“You can’t build a global technology company from India without spending a fortune.”

OR

“Building a Global Brand from India is impossible.”

If you are one of those who believe all this is true then get ready for a surprise. It might change the way you think about Indian startups & entrepreneurs. We are proud to present startups and entrepreneurs doing the impossible. They are the ones who have built a profitable business in India.

We, through the Unpluggd event, are providing a platform where these unsung heroes

–    Share their insights on building profitable businesses – The Indian Way.

–    Share their journey thus inspires you, me and every other aspiring entrepreneur.

This event is a invitation to  listen & share  intimate startup stories . Some of the speakers for the event are –

  • Sanjay Swamy, Ex-CEO, mChek
  • Mukund Mohan, Founder, BuzzGain
  • K. Srikrishna, Co-Founder, Impulsesoft
  • Rudrajeet Desai, Co-founder & CEO, Ideacts
  • Yusuf Motiwala, Foudner & CEO, TringMe
  • Dr. Ashwin Naik, Co-Founder, Vaatsalya
  • Sunil Maheshwari, Co-Founder, Mango Technologies

If interested please visit   http://www.unpluggd.org .You can register directly for the event   here.

Feel free to forward this mail to your aspiring entrepreneur friend or FoF.

For any queries call/e-mail:

Ashish Sinha           ashishk.sinha@gmail.com +91 98452 06443

Amarinder Singh   amarinder.singh.76@gmail.com +91 93431 71420

Satpal Parmar       satpalparmar@gmail.com +91   97421 90747

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Social Networks : Business models and monetization

Social networks are plenty and in past few years  they have grown both horizontally from dynamic user groups to platforms and vertically from  social networks for gays and lesbians to  invitation only groups for social elites.

Social networks are  hugely succesful in India too. According to latest data from camScore indian social networks have grown 50 % in the year 2007-08. Moreover  majority of web users are now social networkers.

india-social-networks-stats

But despite this phenomenal  adaptation of SNs idea , social networks are  loosing  more money  then they make for their investors.

This post is my attempt to understand the whole social network monetisation problems and related  issues.

Social networks are used as marketing and branding  media  and make money through advertising  same way as TV, Radio, Newspaper  does. This way  advertisiding drives the form and functions of social networks. Social networks have to cater needs of two different parties, the actual  user, who want to use them as they wish to with minimum  interference  from anyone incling owners and advertiser who pay for runing the show and what users to behave in curtain way. This create a disconnect between interest of parties involved and there a contest going on between user and advertisers where social network trying to balance the  needs of both  parties.

Social network are new kind of media  in advertising industry and do not enjoy same level acceptence and trust among media buyers  as enjoyed by TV & newspapers. They are yet to prove their effectiveness and metrics used to evaluate thier effectiveness are evolving.

Other challenges involoved in monetizsing are related to very nature of social network. For exampl most of the network rely on user generated content where social network have very limited freedom to play with content. Most of the user activities are action oriented like writing on wall, poking friends, sending sms and hence  provided little space for text/display adversting model. Users are agnostic to any significant changes in social network structure and forms done to suit the  needs and requirements of advertisers. Attempts to sell/use user information to third party resulted  in backlashs and there is increasing awareness among users about privacy related issues. Many user privacy watchdogs  are seeking change in privacy policies of  social networks.

Below is more detailed  analysis of two major issues related to monetisation of  Social networks.

1. Low CPM  or Unsuitable metrics – CPM may not be the best indicator of social network analysis

Lookery, an ad network specializing in social media, offers display ads on MySpace, Facebook, and Bebo for only 13 cents per thousand times the ad is served (CPM); Yahoo’s average CPM is estimated at $13. Video ads on MySpace reportedly fetch just $25 per thousand showings; CBS charges $50 on affiliated sites, NBC as much as $75. (Source)

Next question will be  is why SN have low CPM . The reason is that most social network reply soley on advertising revenue.

Regardless of the model (CPM, CPC, CPA), advertisers value three key measures: reach, frequency, and targeting. Many social media sites certainly score high on reach and frequency, but how do they fare on targeting? Targeting is key, because it determines the CPM rates advertisers are willing to pay. And CPM rates vary very widely: from $16-20 for TripAdvisor to $0.10 for Facebook and MySpace. See, for example, this media plan. (Source)

There is another dimention to low CPM for social networks which is quite counterintutive.

The assumption is that if users are worth money, then more users are worth more money. Theoretically, an infinite number of users are worth an infinite amount of money. It’s simply not true.

There is a point of diminishing returns in Web advertising. Enormous traffic creates a glut of inventory, which inevitably drives the value of ads down. The most highly valued inventory on the Web is branded, high-quality media content. It’s valuable because the content projects value onto the advertiser. When Target advertises on MTV.com, the brand benefits from MTV’s youth-oriented content, giving the brand a youthful shine. In contrast, utility inventory lacks the compelling context that advertisers need to help build identity and image, and in many cases may include negative images. The result is that advertisers have no cause to align their brands with products like Social Networks. Unlimited inventory and negative brand association is a perfect storm for low CPMs.(Source)

Extra : Here is interesting explanations and maths that is involved in calcauting CPM

2. User behaviour

Both  social network & advertsier would like to use datamining techniews to target there advertsing to improve their CPM . But this leds to problems related to privacy fo user information . User behaviour give  different challenges to social network. On social networks, people are primarily concerned with communicating with their friends, not looking to buy items or services. Moreover when marketers try to shake things up, users don’t take kindly to major changes. There are issues related to trust and privacy of user infomation and this lack of trust is mutual.

the fundamental problem that social networks face when trying to monetize through an advertising-driven business model is the lack of trust.  To be more explicit, while brand advertisers have historically trusted people as consumers, they do not trust them in the new role of producer (e.g. uncontrollable content).  Likewise, people who are armed with the power of interactivity are also demonstrating that they are increasingly distrustful of brand advertisers (e.g. ad-skipping).(Source)

I come across few exellent presentations related  to subject. Here are two of them

In the next post I will look for solutions that are been tried to resolve problems mentions above  and will  do some analysis on  how successful are  they in generating revenue for companies. I would  also like to cover  indian  social networks are trying to resolve monetization conundrum

Extra:  Social Networking Is Not a Business* ( Technology review – registration required)

Update : There is change of priorities  in professional and career side and due lack  of time to research I am finishing this article here.

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First Delhi OCC Meet

Delhi OCC gang

Delhi OCC gang

Last evening I attended the first meeting of Delhi open coffee club which took place in CCD ( near brista) at Connaught place.I reached there by 6 PM but it took me a while to locate the right CCD as there were around three – four CCDs and two Bristas.

The ambience was good but little noisy.We have to ask CCD guys to lower the speaker volume twice.
We were around 9 -10 peoples.When I reach CCD Rajat had all ready finished his introduction.We were a mix of startup guys ( employees),students, wannabes ( myself, Ramsagar Ravisagar ) and a hardcore entreprenuer (Rajat).

Rajat Nagpal an  ISB gradute, after working with makemytrip.com is
looking forward to start his venture travelgayan   TravelVidya which is into training
people  in ticket booking.

Shivaas is a student who self-confessed to have  burned his fingers with his venture
shoppingtadaka.But he is determined to be a entpreneur and looking forward to
keep his venture up.He venture is into retail and ecommerce  and he is looking
for experience people in retail domain.
Ramsagar is a linux expert.He is interested in Open source trainig and is developing
some modules for training in linux administration.

Ashok is with Unicef and shared his confusions with us.He is making up his mind
how to use his experience in charity work and fundraising for Unicef to make a more satisfying career move.
During intrduction round we had discussions on wide range of topics.First one was regarding
working from home vs taking some office space.Rajat was in favour of taking office space. His point was valid in case you dont have space at home oryou have family to manage. Personaly I beleive that weather  you should take office space or not depend  on both personal and professional needs.Personal in the sense you need some self discipline when you wok from home .If you have to show your office to client
or client make frequent visits to your office in that case one or two seater office wil make  good impression.What is biggest problem in having a office space is to find one withright size and price.When you are bootstraping you want to save every penny.In case you are in software development or internet bussines we can easily use our home as office.

We talked about different schemes to use SMS for marketing.I learned about GSM modem which was something new to me.

Shivaas got interesting and useful feedback from Rajat on his venture.

There was another interesting discussion on hiring people.Rajat made some pratical points regarding hiring. I really liked his idea of hriring   housewifes and retired people in same domains.
Here we had clash of opinion on HR managment issues like temp. staff and training costs.

To sum up it was great experience . If you are a freelancer,student looking for startup experience,angel investor, or a wannabee  entreprenuer I expect you tobe there next time.

 

Delhi OCC gang

Delhi OCC gang

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Businessweek’s page3 list

Before you read further have a look at this LIST.Businessweek claim that  this list represent  50 most powerful Indians. Agreed? Well, I am not.If you look at the comments ,most of Indians share my view that this list is a insult to readers.

 I appreciate editor took a  decision to have a exclusive feature on India celebrating 60th year of independence .But I doubt he selected his best people  to do the job.Authors seems to be in real hurry.Forget about the deepth of  research, there are serious factual erros.

This is one of the most confusing lists I have ever seen.Just imagine Akshay kumar and Ratan Tata on same plateform.Where is Kalam? Where are all the NGOs?Why aren’t there any doctors, scientists, engineers and authors? What about international CEOs such as Indra Nooyi and Mr. Bose? Also, what about journalists and/or media personalities? Religious leaders??

Only auther can explain what they were thinking while doing such a pathetic, moronic compilation.

One thing I learn from this is that International media can be as irresponsible as local media.And yes, Businessweek need better writers.

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New Synovate AsiaBUS study on Asia Pacific Web 2.0 markets

Microsoft Digital Advertising Solutions commissioned Synovate to conduct a survey via its AsiaBUS Service. It aimed to gauge the size of the blogging/social networking market as well as to examine usage habits in Asia Pacific.

The study covered the following 10 markets: Australia, China, Hong Kong, India, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand*. A total of 11,306 people aged 15-64 were interviewed during December 2006, projected to a universe of 187 million.

Results are not very surprising. Korea with his world best broadband network , China & Taiwan with their   highet PC penetration (due to low hardware cost) are leading web 2.0 markets.One area where they are legging behind  is blogging.This can be explained in term of language barrier.I doubt if totalitarian government and lack of freedom of expression in China have any  discouraging effect on bloggers from China.

India is far behind in social networking and IM services but did surprisingly well in bloging front.  Low pc penetration coupled with poor broadband infrastructure make India a comparatively smaller  web 2.0 market.

 Can we say democracy rocks 🙂 

Happy Independence day India !!!!!!!!

Source:  advertising.microsoft.com 

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