Rediff clearly disappointed the street when it announced its Q4 results. In Q4 the Revenues plummeted 50% YoY to touch US$4.50 million from US$9.10 million. The Net Income also suffered badly as it included non-cash goodwill and intangible asset impairment charges thereby reporting a net loss of US$8.86 million against a net profit of US$1.1 Mn last year.
The FY 2008-09 revenues were US$25.43 million against US$32.25 million in the previous year.The net income for financial year was also in red touching US$11.30 million.
Ajit Balakrishnan, Chairman and CEO, Rediff said,“The continuing economic slowdown in the travel, jobs, matrimonial, shopping, consumer finance and real estate sectors in India continued to affect online advertising revenues, in particular revenues from other online companies in these industries. Our revenue numbers for the quarter were also adversely impacted by a 25% year on year average depreciation of the Indian Rupee vis-à-vis the US dollar”.
The disappointing numbers are no surprise from Indian online conglomerate as the tone was already set up by similar results of Northgate Technologies -parent of Bharatstudent and Axill, announced last week.
In the meanwhile Rediff has re-iterated its focus on simple site navigation and Social media initiatives to bolster its online revenues which could be evident from their recent revamp on Rediff India Abroad site http://us.rediff.com.
The company is currently sitting on comfortable cash equivalent position of $45.6 million and has also said that it would incur additional operating expenses of about $1.0 to 1.5 million for next few quarters.
The strategy going forward for companies like Rediff should be to simplify their online site structure which simplifies user navigation and scrap properties not seeing a major jump in traffic.
For Rediff it could be doubly important to segregate traffic earning services like Money, LocalAds etc under separate domain name, thereby attracting more niche traffic and may help in attracting Higher Ad revenues.
have they reduced their prices ? Sulekha definitely has slashed prices 50%
Disappointments are to be expected during a recession.