Month: November 2010

Decline of Branding, Context And Death Of The Homepage

As we move further into a heavily aggregated, curated and crowd-sourced world of distribution for media, one challenge that the established players (in both digital and traditional) face is a loosening of grip in the context and branding related to the content they publish. In a world that existed before the advent of Twitter, Facebook and the aggregators like Techmeme, the sole point of distribution for publications was their own website. Briefly, there was a belief that RSS readers would change that, but it never picked up enough momentum to be ever called a tool that was used by the masses.

A common theme that I am hearing consistently from publishers of all sizes is the increasing volume of referral traffic from the new distribution channels. While this windfall in traffic is definitely is not a bad thing, it also points to a future where the concept of a homepage will gradually decline and your primary mode of reaching out to your audience will become something over which you don't have anything beyond a small degree of control.

Leveraging these new channels also mean that you are exposed to risks like fake profiles & accounts (seen in the case of the fake Twitter ID of BP) and change of terms of service that is one-sided, leaving you open to a significant loss traffic and revenue if you were to run afoul of the rules of the platform you are riding on. This also brings about a problem of a loss of branding and context when you are not a primary source for the information you publish.

Death of branding in such a situation happens in two ways:

1. The platforms enforce their own rules regarding appearance. Twitter, for instance, only allows you to put up a background image that can't be linked to anything else. Compare this with your regular home page. The difference is significant. In the matter of Facebook the difference is even more stark.

2. There is also the loss of form factor since most of these platforms allow you to access the data over their APIs, which further strips the content of any form of branding. You look and feel similar to twenty other accounts a user may follow. There is little difference between you and the “what is your favourite kink?” quiz.

Death of context happens when you get linked to contexts completely outside your control. In the pre-social world, linking was from the homepage/section page, to the story page, which was a completely controlled environment. In the current world, for a controversial topic or publication, there is always the chance that you get linked to something that has a “LOL” attached to it. With real time search results now being made a part of regular search results, the chances of these results erasing the original context is a major problem.

To get around these issues a two-pronged strategy is required:

1. Ensure that your readership/audience is engaged on all major platforms primarily from your own accounts. You need to own the conversation on the platform. This, though, is not for everyone and it can be major problem for smaller players in terms of cost and sustainability.

2. Capture the interaction of your regular audience on your own domain, thus providing a substantial value differentiation in what a member gets on the external platform and your own domain. When you find the people who interact and contribute consistently, reward them and incentivize others into doing the same.

In short, the new forms of content distribution are wonderful things, but do not grow it at the cost of your own domain by neglecting it. Build proper funneling strategies to measure engagement, retention and churn. If you value your own place in the pecking order, don't sign your death warrant by helping build a distributed iTunes store.

Filed under: Misc

Giving Back

This year I have supported three Open Source initiatives that I have probably used the most. Elgg, NeoOffice and Wikipedia have contributed greatly to my ability to earn a living, learn a lot more than what I would have otherwise ever known and build and express a lot of ideas and concepts. These are not major contributions and they have been made in a personal capacity, but I do intend to push it up a notch every year and once the company steadies itself I will institute a proper program that will identify more initiatives and contribute a lot more.

A lot of what we are able to do on the web these days is possible due to the work of a handful of people who have often worked for nothing in return. If some of the software that enables us were to be billed at the level that most shrink wrapped software is billed, the internet as we know it would not exist today. You can argue about the validity and feasibility of that model, but you can't argue that all of us have benefitted greatly from it. Even though most of the stalwarts who have put together these things have not demanded money as a must-have in return for what they have created, it is a good gesture to make any contribution that you can make.

If it is possible for you, do try to find one of those that you like and contribute in whatever capacity you can.

Filed under: Business, Misc, Social, Start-ups

Quick Note On The Unholy Media-Business Connection

Much of what has been reported has not come as a surprise for most who have been on the inside. I saw a lot of this first-hand in 2002, when I was still part of the editorial set up, and could never really figure out how to make my peace with it. Somehow you are made to understand that this is how things are, get on with it. Why I finally left the editorial side of things about a year or so after that had a lot more to do with the fact that I just was not cut out for being a journalist. I did not have the persistence, patience or the thick skin required for it. Nor could I figure out the incredibly petty politics and other weirdness that accompanied it. Believe it or not, the business/operations side of it was much better compared to the editorial.

I was reading Indrajit Gupta's piece on the whole mess and was quite amused. He mentions how young journalists, who are not as well trained/mentored as an older generation used to be, are easily swayed by the temptations of planted information and leaks. The nice sleight of hand he pulls off in the argument is to absolve the senior journalists (most of those who are on the tapes could not have been called either “young” or “junior” in the past decade) and let it all rest on the kids who are not trained well enough. True, there is an issue with the quality of the younger professionals these days, but they did not cause this and the senior ones are the gatekeepers. The buck stops there.

The extent of all this is much beyond what is spoken or written about. PR companies have extensive profiles of both publications and their employees. It is well tracked, catalogued and often profiled to the extent of how should a story be pitched to you if you are working a beat that their client has interests in. That you are getting played is often a fact that you are not aware of even when you strongly believe you are not getting played. Fancy junkets and deep throats have long been a part of the industry, I am yet to come across any journalist who says “no” to either or both. If you work the beat, you always have to work your sources, it is just that the information is a lot more valuable these days, heavily incentivizing the plants. Consequently, it needs a lot more of vetting and scrutiny. But who has the time for all of that?

Filed under: Industry, Media

Are Internet Portals In India A Case Of Death By A Million Cuts?

A curious aside from yesterday's post on is that almost anyone who has a portal in India is not having a good time. There are not many who can claim to running one in India these days. I can only think of Rediff (, Times Internet Limited (, Web18 ( and Sify Technologies Ltd ( as the only players out there. The common thread between all these companies is that they are all in the red. It is a flaky to point out the portal angle as the only connection between these companies and their losses, but it is not without merit.

My reasonable guesstimate puts the top line for a company (it is a guesstimate, so do pardon me if the numbers are way off) close to Rs. 100 crore in revenue for a year. Most of these companies have a head count that is not lower than 150. With such a head count, compensation itself can easily be over Rs. 20 crore for the companies in a year. Servicing the facilities will add up another Rs. 5 crore a year to the bill. The technical infrastructure can add another Rs. 6 crore to the annual bill. Add another Rs. 15 crore in marketing expenses and it all adds up to a good Rs. 46 crore in a year.

The problem is that the head count is way over 150 in these companies (especially in those companies that are doing Rs. 100 crore in revenue) and the expenses I have listed are on the lower side. I have also not added other significant components like content licensing costs as they vary wildly from company to company. In the portal side of the business, advertising on content is more or less the only avenue for revenue and with the cost structures these companies have, it is impossible to scale those without a corresponding increase in costs. After a point, it is a case of chasing your own tail unless you can alter the fundamental variables in the equation.

The numbers mentioned above are not authoritative by any means and a lot of it can't be corroborated in any meaningful or public manner. But it demonstrates the point that doing more of the same that has been done so far will take you nowhere. This also represents a reasonable opportunity for a well-funded new operation that can be small and nimble. This also explains why the successful larger companies on the Internet India have been mostly transactional nature, which is only of limited relief since none of those have managed so far to diversify out of their core offerings.

What do you think?

Filed under: Advertising, Business, Industry, Internet

Rewind: Revisiting

It is never easy to write about your former employers or products that you have been closely associated with, without biases or other aspects that cloud your judgement sneaking into it. But I will do my best to stick what is important and leave out the lesser details in trying to analyze the product.

The product itself was meant to be the spark that should have fired up Web18's growth engine and pushed the company into a higher orbit. It was the vehicle that would have taken the company to the NASDAQ listing, doing a CNN-IBN in the online domain for Network18. But, it did not start that way. In its early days, was meant to be a much smaller product that would provide contextual and activity-based content to those who used the service. It was to have grown organically, mostly by leveraging network effects and it was to be used more due to the incremental value the service provided.

But the 2006-2008 period was, well, much like what it is like now in 2010 – a lot of money chasing ideas that could potentially act as incredible multipliers. was also required to form a better narrative. At that point in time, Web18 had an industry-leader in that brought in most of the revenue, with and a clutch of smaller sites bringing in a smaller percentage to the table. It was an operation that relied heavily on content and content-based companies rarely transform themselves into stories that the markets like to invest into. Thus the transformation of the simple idea into a massive consumer-oriented 'portal' was kicked off.

And it almost worked. We can never be sure if it could have been pulled off if other factors had not intervened, but the buzz certainly was there. After the CNN-IBN story, the market expected another bit of magic in Web18, the trade press was positive about it and even the i-bankers were talking about a valuation of a billion dollars. If you noticed the timeframe mentioned earlier, you would have guessed that what stopped the train right in its tracks was the downturn in 2008. To be fair, the downturn only brought out what were clear flaws in what we had put out as a product. With the supply of money being not as plentiful as 2007 and the markets going into shock, neither a listing was possible nor more accelerated burn could be sustained.

Currently, the product is something that is already bogged down by its legacy. It is still a significant part of Web18's listing strategy, but one that costs the company too much sustain. It is not an enviable position for the company – it has failed to diversify beyond what has been its strength for close to ten years (content) – and it has gone nowhere in building out the transactional side of the business other than having the connection on its side. To show potential, has to be sustained, but the longer it stays without showing exceptional growth, the more feeble that story becomes for Web18. It bleeds, but there is no cure or respite in sight.

Sometime in 2009 I had privately said to a handful of people that Web18 should sell They still had a decent amount of good buzz going for it and with many investors looking to enter the Indian market, they could even have found a buyer who would have probably even turned in a small profit on it for them. Of course, that would have come at the price of compromising the listing and severe loss of face, but that is what would have taken to change course on the product and the company itself. This probably is not an option today as the underlying story too has changed significantly.

But going back in time, it is an instructive thing to take a look at what we got wrong with the product.

1. Cost: Since the market was flush with cash it also nicely slotted in with a 'name-it-buy-it' philosophy. We were quite gung-ho, with an attitude of taking on the best heads-on, cost be damned. At launch time the product was already on its back foot because of the huge costs involved in getting it up and running. This was a major mistake in a market like ours where the potential for growth is a significantly larger figure than the rate at which that growth is being realized. India is market where you don't want to fight with an arm and a leg tied. It is a long haul here and you can't last for too long on one leg.

2. The Product: We changed it way too many times and pulled way too many things into it. Email was one such mistake. It is a loss leader in majority of online operations. Most of the infrastructure that goes into sustaining it only receives and blocks spam and the inventory is of an awful quality. Music is a similar thing. The licenses cost money, it costs money to serve the traffic and the audience always will go away some place else if you try and make it paid. You are then left with skinning players and sections for less than 2-3 lakh a month.

We could eventually not put together a coherent, well thought out product. We put everything we thought would do massive traffic into a basket and put it together online. And it did traffic, lots of it, but at a cost that probably did not justify the returns.

3. Numbers: I don't think we ever putting a cost-per-user or revenue-per-user number ever on it. Looking back at it (with hindsight being the awful thing that it is), it seems pretty bizarre that we just did not attempt to do anything of that sort.

4. The why: The reason was put together was to garner more traffic and bolster the numbers. It looked like the perfect means to an end. We really did not much research into whether there was the need for an aggregator or a music portal. While traffic is a very valid and good reason, it is really not the horse that draws the cart in the online domain. To succeed, you have to be a platform (which means you own a sticky audience) or you facilitate transactions (money or information) or you publish or distribute excellent content. wound up being a bit of all of that and none of it in its entirety.

As it is the case with looking at anything in retrospect, it is much easier to say these things now. On the other hand, I am not really sure if things would have turned out differently even if we were willing to address these issues at that time. When you are riding a wave, the world really does feel like your playground. But it has a lot of lessons for us who still are in the domain, trying to build out different things in it.

Filed under: Industry, Internet

Progress Report: November; Change of direction

After a very long and hard look at the past two years I have decided that the company needs to change focus and the mode of operation. At current revenues (or even at 10x) it will take me at least three years more to get this into a place where it can start doing what it was started to do. There is also the fact that between a small operation and a big operation the overlap in effort is about 80%. You wind up doing a lot of things in common in both approaches.

But, the crucial factor that swung the decision for me was the fact that technology is the wrong place to keep as your sole focus if you don't have core IP that has sustainable value. In other words, if you can't license or sell it as a unit (or units), the value you bring to the table is largely related only to the price of a service and other easily replaceable variables. And that end of the market is a tough place to play at as there will always be someone out there who will undercut you. What makes matters even tougher is that the buyers are not themselves aware of the finesse of what lies underneath as long as it looks reasonable on the surface.

For Frontiernxt, that is where I had always seen the opportunity – a degree of finesse that starts with what lies underneath and meld it with higher parts of the product/organization that need not be digital to start off with. If you are a shop that primarily addresses the 'under the hood' aspect, a failure to transition to an engagement at a higher level leads to competing with the bottom feeders. Thankfully, the existing clients are not people who operate on those terms, but a look at the prospective market place makes it clear that those are exceptions.

The technology market has become a lot more commoditized in the past two-years. This was something that was an advantage for me when I started the company two-years ago, but it is now slowly starting to be a problem than an advantage. Product builds are easier to do and the gap between being excellent and having only absolutely essential is narrowing at an alarming rate. Granted, not many are out there who can still pull it off with a great degree of finesse, but what I have seen is that the gap is narrowing at an alarming rate.

In practical terms what this means is a gradual withdrawal from doing builds for clients. For what I set out to do, I need to have conversations which happen at a level that start higher than pure play execution. This may mean changes in the structure of the company itself and creation of new partnerships to address the gaps in competencies that exist in trying to move higher up on the curve. The January review should be an interesting one to look out for.

Filed under: Frontiernxt