Indian Entrepreneurs Count Gold On The Social Networking Business Model!

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 (Indian Martini) to make it look like Orkut. Vivek had a target of registering 1 million subscribers which he missed, and therefore sold to Hindustan Times Media for $10.00 Million (an estimated figure) on Nov 20 2007 even though 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 for re-marriages and is also funding, 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, 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


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.

17 Responses to “Indian Entrepreneurs Count Gold On The Social Networking Business Model!”

  1. December 4, 2007 at 5:25 pm #

    For reliance, it MAY be an excellant marketing technique as, they can use the base to sell their own offline products including their mobile., for others, its just another startup

  2. December 4, 2007 at 5:55 pm #

    let us be accurete.
    Desimartini sold for less than Rupees 10Million so no about $10M as it is a completly rubbish number.

  3. rick
    December 4, 2007 at 6:43 pm #

    I repeat what M.Murthy said on WATSHOW “there is nothing Indian about social networking.”

  4. December 4, 2007 at 7:49 pm #

    Great post Ronak! enjoyed reading it especially the stats that are clearly defined – an eye opener in a sense

  5. December 4, 2007 at 7:50 pm #

    Great post Ronak! Enjoyed reading it – the stats were an eye opener!

  6. December 5, 2007 at 11:30 am #

    @ Javed and Rick – I agree with both of you. And we had mentioned why HTMedia might have made a mistake in our earlier post as well -> Earlier Post

    This post is more about how social networking is actually making some real money for startup entrepreneurs. And i agree Less that 10 millio $ could be anything.. 2 million or 4 million as well. But No one knows the real number till its openly disclosed.

  7. Ronak Shah
    December 5, 2007 at 11:58 am #

    Thank You Sarathy/Javed/Rick/Harshil and Rajiv for commenting on my posts.

    The deal was worth $10 million is what the source says:

    Rajiv is right, the deal could be anything unless the deals worth is disclosed openly.

    Ronak Shah.

  8. anand
    December 5, 2007 at 12:15 pm #

    How do you evaluate an internet company? How much do you think is worth? Any plans to rope in an investor?

  9. anand
    December 5, 2007 at 12:23 pm #

    Guys your articles use to be filled with numbers and statistics which were a real delight reading and were really enlightening. Lately all articles are more of news updates than real insights. would love to read more of analysis than just updates. Just a suggestion.

    Love what u doing any-which-ways :)

  10. December 5, 2007 at 12:34 pm #

    @Anand – There is no hard and fast rule to value internet companies. Its usually what is a similar property worth online or how much revenue can this possibly earn me in 5 years kind of valuations. Also userbase is another metric investors use. There are also strategic value considerations.

    With Respect to WATBlog looking for an Investor well we wont mind talking to investors and exploring opportunities.

    With respect to more news and Less analysis I disagree. Well Yes on the whole it may seem like that but thats because we have increased the number of articles we do in a day. But we continously have analytical articles. Recently we had analysis on Web Metrics, Facebook improvements, Orkut adding privacy etc.

    Yes we have increased the news updates as well as people want to be updated about the happenings. Also if you have notice we have a new weekly video show in WATShow. So lots more can be expected from WAT in the future. Analysis wont become lesser but other things like news, events, video, audio shows, interviews will increase considerably.

  11. December 5, 2007 at 2:24 pm #

    Nice to read more about the Indian social networking context. Not exactly sure as to which are the real companies to watch-out for interms of the ability to scale up quickly, being different from Yet another Facebook or Orkut clone…and most importantly able to monetize the traffic and users on the site….
    This will be interesting to see in the market since i presently feel that this market is too fragmented and consolidation is out of question…So you will see a lot of players going belly up…and some going the distance…MingleBox and BigAdda are two of my favorites who might just hit big time.

    Sandeep Balaji

  12. December 5, 2007 at 2:44 pm #


    “consolidation out of question”..I don’t think so.

    I think, consolidation is the only way forward. The acquaintance of Desi Martini by HT Media is a testimoney to this fact.

    You may like my The 2.0 Imbalance post on this topic

  13. December 5, 2007 at 4:53 pm #

    I’ll like to see which one of these can latch on to the facebook type monetization model. Allowing Indian small business owners to do PPC on social networking sites and allowing them to target based on core demographics is what will unlock true potential!

    ~ Saumil

  14. Pramod Jain
    December 11, 2007 at 8:10 pm #

    Watblog with the same type of frequent content posting will surely worth a lot in future, In US , i think there is a one real estate blog which got some million dollars.,

    PPC/PPl, nothing will work on Indian social networking sites currently,

  15. December 12, 2007 at 12:11 pm #

    @Saumil – Thanks for commenting.. looking forward to see your posts on watblog as well.

    @Pramod – Thanks for the encouragement regarding watblog :). Hope we do really make millions one day and make your words come true. But i guess what we do is what we love doing so even if it doesnt translate into millions we shall continue doing what we are doing! :D

  16. July 7, 2008 at 12:10 pm #

    It’s really amazing to read such stats about the so much involvement of Indian entrepreneurs into social networking! Interesting though, making it a real competition!

  17. Arpit
    January 9, 2010 at 2:05 am #

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