Web18 was in the news just 3 weeks ago for raising a fresh round of funding of 10 million $ from Nokia Growth Partners. This was the second time they raised a 10 million dollar round. The first time they had raised it from Tracer Capital over 3 years ago. Web18′s parent company Network18 was hit hard by the recessionary environment last year. This had made them delay their IPO plans as well.
Network18 announced its Q2 results for FY 2009-10 and the following are the key highlights on their Web18 division:
Web18 has cut operating losses from Rs 175-190 mn per quarter in Q2 2008-09 to Rs 51 mn In Q2 2009-10. Q-o-Q there has been an increase in total revenues of 14% i.e. from Rs.142 mn to Rs.160 mn. The operating expenses have also increased about 16% from Rs.179 mn to Rs.211. mn. The net loss has increased from Rs.85.89 million in Q1 2009-10 to Rs.100.33 million this quarter.
As the results show above Web18 continues to bleed losses of close to 10 crores a quarter but its total losses have been cut down Y-o-Y. On the brighter side in.com still holds on to its No.2 position among Indian horizontal portals as per comscore. Also Web18 seem to have ventured in serious verticals like education as well with their partnerships with GECOM International and launched “Myschool.in.com” which aims to connect all key school stakeholders through a real time, virtual community. This community has already attracted over 50,000 registrations within 2 months of launch across 68 cities in India claims their earnings release.
On the social media front Web18′s Ibnlive.com has made an alliance with Facebook and recieved 250,000 clicks from Facebook, resulting in an incremental 1 million page views for IBNLive.com.
Web18′s cash cow Moneycontrol.com partnered with Intuit Inc and launched Intuit Money Manager. Besides this moneycontrol hit a landmark of 2 million registered members. Also 85% of Moneycontrol users, using the site’s Portfolio tracking service, have investments worth more than INR 300000.
On the services front Web18 did website development for Mastek, Religare Insurance, Fear Factor2: KKK (MTV), Dale Carnegie, Delhi Public School etc. Our sources tell us that their cash flows from these services is quite good and form a sizable part of the overall revenues.
All in all one can say that Web18 has been in investment mode for over 3 years now and given the amount of investors money that has gone in one would expect revenue pressures to start mounting on Web18 sooner rather than later. It may make sense to hive off or shut down certain non performing services and focus on core activities. Yahoo has been on the same path for the last year of so and Web18 even though has a recent 10 million dollar funding behind it should tread cautiously before spending it.
