Social Networking has taken up Indian entrepreneurs with awe. As web 2.0 sites like orkut are filled with loads and loads of profiles of Indian youngsters and others, Indian entrepreneurs are starting to count gold on the social networking business model. There are two instances where in Indian entrepreneurs have found gold.
The first instance is about a young lad. Vivek Pahwa, a 26 year graduate from the Hyderabad based prestigious Indian Business School, had borrowed $76,000 to “do something” in the Internet space and thus setup Desimartini.com (Indian Martini) to make it look like Orkut. Vivek had a target of registering 1 million subscribers which he missed, and therefore sold Desimartini.com to Hindustan Times Media for $10.00 Million (an estimated figure) on Nov 20 2007 even though Desimartini.com has only 2,50,000 subscribers and just 2.5 million monthly hits. We had even blogged about the deal. Meanwhile, he has setup another website called SecondShaadi.com for re-marriages and is also funding Antya.com, a soon-to-be-launched ‘India focused search engine’.
There is another instance where Indian entrepreneurs have realized the potential, social networking websites hold. Three classmates from IIT, New Delhi have setup Minglebox – a social networking website that caters to the student and working communities, and has 1 million users from 1,000 schools who spend an average of 35 minutes a day on the website. Sequoia Capital, a U.S. private equity player invested $7 million in Minglebox last year as they were mightily impressed by their business model.
Sumir Chadha, MD – Sequoia Capital, impressed by the web 2.0 focus of Minglebox says:
“Social networking today is one of the most popular Internet activities in India,”
Even Fropper.com, which was a dating site earlier, rechristened itself three months back into a social networking website so as to attract a lot of traffic by targeting specific communities. Meanwhile, Reliance Entertainment plans to invest US $100 million on its own social networking website BigAdda.com.
Some facts why Indian Entrepreneurs and Venture Capitalists bet highly on social networking business models :
- 44% of the total number of Indians who logon to the internet use the social networking websites.
- Out of that, Orkut which is owned by Google owns 64% of the social networking market share. According to our source, orkut has approximately 69 million users as per August 2007 estimates. Out of which, at least 16.9% orkut users are from India.
- Nasscom, in its 2007 report, has estimated that the number of broadband subscribers, currently 1 Million, will hit 20 million users in the next three years and the number of internet users in India which is currently 40 million will rise to 100 million users by 2010 .
- According to our source, 54% of India’s population is under the age of 20 years which is nearly 540 Million people under 20 years of age.
- India is known as the IT hub of the world.
- India signs up more than 7 Million new telecom users each month. Indian telecom service providers such as Bharti, Vodafone, Essar, and Tata Teleservices are considering the proposition of adding social networking services to their user base.
- According to a Telecom Regulatory Authority of India (TRAI) Report, the number of Indians using their mobiles to login to the internet has almost doubled from 16 million to 38 million just last year.
- With a population of more than a billion people, India has become the golden pot for investors worldwide.
The growth of broadband will lead to a boom in internet availability across the country. As increasingly the young Indian population is starting to become internet savvy, the opportunity of social networking websites holds true for Indian entrepreneurs. Already, a lot of Indian users are hooked to web 2.0 sites like Orkut and Facebook. Social networking has proved to be a very good opportunity for entrepreneurs and investors.