Newsmaker: Search, a half a world away

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reaching across the national divide. VoIP on IM helps people to go to the Internet cafes and speak to others in other parts of the world for free. It's a utility tool, not just something that teenagers do.

Will a lot of your new users come from mobile phones?
Balakrishnan: Absolutely. Again, it's a feature for both India and China. The number of mobile users is many times larger than that of PC users. Mobile phones are cheap. The learning curve isn't that much, and you can do wonderful things. In Asia, the mobile phone is the basic perquisite for any teenager; otherwise he won't get self-respect.

Does Rediff.com derive most of its revenue from advertising, or do you also participate in connectivity deals with carriers?
Balakrishnan: We have relationships with all these mobile players. Bombay city has eight different mobile phone companies, so it's a great consumer opportunity. What happens is that when somebody downloads a piece of music or a ring tone on a phone, we get a share of that percentage.

If the trend works out the way you're suggesting, then the dominant percentage of your customers will access the Rediff home page through mobile phones. So then what are the implications for content?
Balakrishnan: The first challenge is for a journalist to deliver a news report in 160 characters. Cricket is the popular sport in India, as you know. Match reports from our service are 160 characters. Every hour or so, a journalist submits the score and some words to describe the action. Our Indian journalists have, I think, been dragged kicking and screaming into this new world. Stock market updates on a mobile phone as an SMS message is very important.

How about lottery tickets or e-commerce?
Balakrishnan: I think it won't be lottery tickets; it will be movie tickets. In mobile commerce you need instant gratification. You don't need to go back to something. You want it now and you want it from where you are.

Our Indian journalists have, I think, been dragged kicking and screaming into this new world.

I was intrigued that matchmaking seems to be a big part of your site.
Balakrishnan: You were looking at the international site. Matchmaking is of importance to us, as the Internet is excellent for connecting people. It's been extremely popular, and part of the reason for the popularity is the 25 million Indians who are outside India.

Why has the Internet and technology as a whole boomed so strongly in India, while if you look next door at Pakistan, they're at square one?
Balakrishnan: Tough to say. I think it's got to do with investments in education. The investment in education, which happened in India over the last 50 years, is different qualitatively. Indian education is very science-oriented. Pakistan has a relatively high literacy rate, but I do not believe that it's as science-oriented. The Indian university system also is different. There is a large number of universities, and some of them are very old.

Do you see any kind of competition from Google?
Balakrishnan: Google is the search king. There is no doubt about that. I think they've made some progress in India as well. But search volumes are relatively low in markets like India and China, and there is a very strong reason for that: commercial search volumes. The U.S. Internet economy has been built around e-commerce and there've been e-commerce sites here now for years. When you search for an iPod, there's a good chance that you would find 500 people offering that. When you have such a situation, then there's a role for product comparison sites. Commercial search in the United States accounts for about 20 percent to 30 percent of all searches. In countries like India and China, it's still very small--maybe 2, 3 or 4 percent.  

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