Online Marketing Insights

Friday was the end of TiEcon Delhi 2008. Great sessions over the last 2 days were silverlined by this session on “Future of Internet”. We have seen some great speakers over the last couple of days, and this session was no different.

OMLogic Blogged the event live, and this is Kapil Gupta bringing the details to you. A must read for everyone participating in the Digital Revolution in India.
The session has the following panelists:
Sanjeev Bikhchandani, Founder, Naukri.com – Chair
Shailesh Rao, MD, Google India
R.Ramaraj, Sr.Advisor, Sequoia Capital Advisors
D.Shivakumar, Vice President & General Manager, Nokia
Mahendra Swarup, Chief Mentor, SITG
Rohit Agarwal, CEO, techTribe – TiE Host

Key takeaways from the session were as follows:
- India will remain single screen household for a long time. IPTV, DTH operators will play key role in expanding reach of broadband.
- 80M internet users is when major ad revenue starts flowing into the internet marketing.
- What will really drive the steepest slope in Internet growth in India will be next set of services which will address issues of Indian customers. Spirituality, governance, healthcare, matrimony, etc..
- Real question for growth in India is entrepreneurship. Are we seeing start-ups which will create the level of innovation to deliver next set of products?
- Growth of Web 2.0 in India is dependent on delivering the next set of applications which can promote growth of user assisting user.
- For new businesses in Web2.0, following are guidelines for success
1. Expertise wins
2. Scale is king
3. Web 2.0 businesses don;t need that many people. Staff very light.

4. Use free tools, open source.
5. In India, build business which is india only.
6. Build your business around Google, don’t compete with Google.

- Internet and mobile internet growth in India will be entertainment driven, not enterprise driven
- Go cross-media for marketing

Below is the detailed conversation between the panelists.

Rohit Agarwal kicked off the session by talking about the current economic scenario. It was a Q&A session, and Rohit asked the audience to write their questions on paper sheets provided to them, so they can be brought up to the panel, and they can respond to the questions..
R. Rajaram talked about the telecom sector and how the government policies over the last few years have helped fuel the penetration.
Sanjeev: When will there be 200M internet users in India
Mahendra Swaroop: Govt is putting 26B to help get broadband into the villages. Current penetration is 20-35 Million. There is tremendous opportunity for Creating mega brands on the net. India will remain single screen household for a long time. IPTV, DTH operators will play key role in expanding reach of broadband. 80M users is when major ad revenue starts flowing into the internet marketing.
Sanjeev (to Shivkumar from Nokia): Mobile is the next big wave. Nokia is putting lot into mobile but not happening.
Shivkumar: It will happen, its just matter of time. America is no longer the center of mobile revolution. They represent 17% of the market. 52% of revenue for google came outside America. Internet has 2 dimension. Affordable Qwerty keypads will be very useful. Its already happening. It will happen in 4-5 year.
Sanjeev: Google is having great success in India?
Shailesh: Great response from Indian businesses. Concerned about entrepreneurship and innovation. What will really drive the steepest slope will be next set of services which will address issues of Indian customers. Spirituality, governance, healthcare, matrimony, etc.. Prices of chips and PC’s will fall. Real question is entrepreneurship. Are we seeing start-ups which will create the level of innovation to deliver next set of products?
Mahendra: Indiatimes has verticalized the market. They are launching separate brand for mobile.
Ramaraj: Worried about innovation. He brought up the fact that most countries had internet revolutions around one central theme. For e.g. E-commerce did it for Europe, and online games did it for china. He also talked about applications like tutorvista (teaching students across the globe).
Shailesh: India can serve as a platform for much of the emerging world. SEA, ME,etc.
Sanjeev: Cable had limited penetration till it was English. Local and it exploded.
Mahendra: Local content will definitely be the key.
Sanjeev: What is future of SMM. Potential of web 2.0 given current financial crisis.
Rohit: Penetration is a huge issue. No killer app yet. Web 2.0 worldwide is the concept of users helping users. Question right now is what are the applications which will deliver that value. Education, healthcare seems promising. But 90% of education is still delivered using local language.
Sanjeev: What’s gonna happen to funding. Will it be difficult to get funding. Expectation few months back was 60-70% of companies will get second round.. now they say 20-30%
Ramaraj: During recession may be great time to build great company. Valuations will be lower. Second round funding may be small. money is available but companies would need to be more cautious. If you need money, there maybe problem short term.
Sanjeev refered to the 56 slide sequoia presentation at slideshare, which was also covered at alootechie, and asked everyone to read it.
Sanjeev: Will LP’s meet their commitments.
Ramaraj: Not seeing a problem yet. Early stage funding may reduce. Risk appetite will be lower.
Sanjeev: How will mobile 3G help small companies market?
Shivkumar: In India, it will be entertainment driven, not enterprise driven. But fine targeting will definitely be possible.
Sanjeev: What is the future of Wimax?
Ramaraj: Wimax will make a difference. Reserve price got double, so its bit prohibitive.
Sanjeev: Future of search. Anyone taking market share from google?
Shailash: Not enough innovation. Google making search more useful for Indians. Litmus test for when search has become effective, every search provides only one result and it’s the right result for the user.
Sanjeev: Can someone disturb google.
Mahendra: Not at this point. Google has done a great job of creating an entrepreneurial ecosystem. Young entrepreneurs planning on internet based enterprise, build it around google, and they would have the best chance of success.
Sanjeev: What happened to cyber cafes?
Ramaraj: Cyber cafes still account for 47% of internet access. Problem is lot of competitors, very low prices. Quality of access, user experience, provide more services holds the key to making the cyber café model more ubiquitous. Some cyber cafes are starting to innovate. Bring in LAN based games and Printing services etc. There is company commoditizing and consolidating cyber cafe screens.
Shailash: Cyber cafes need to innovate. PC in the home is still not viable. Pay-per-use model has a role to play. Someone has to see the opportunity and innovate.
Sanjeev: Why not enough profitable internet businesses in india of any significance?
Mahendra: Penetration and scale.
Shivkumar: Number 3 player in most categories doesn’t have more than 10% of share. For full line player, you need 15%. in internet industry in india, users are used to free. So, not enough money to be made.
Ramaraj: Not enough killer apps to get paid by customer. Not enough apps thinking about global marketplace.
Shailash: Web 2.0 post 2000 bust had following rules:
- Expertise wins
- Scale is king
- Web 2.0 businesses don;t need that many people. Staff very light. Use free tools, open source.
In India, build business which is india only.
Rohit: Scale is the problem. We haven’t tried enough businesses in india. We have tried social networking.. Most business think about site and adsense. We are still in infancy of what internet business is.
Sanjeev now went to Nikhil from Medianama and asked why businesses are not profitable
Nikhil: Primary factors are Scale and lack of cross media utilization. Naukri has done a great job of going cross media. Most business restrict themselves with one media.
Sanjeev: What is future of businesses based on blogs?
Nikhil: Time to get more people. People looking to monetize needs to again go cross channel.. Advertising maynot be a viable channel.
Another member from the audience (Pawan, couldn’t capture his last name or company) mentioned that Law is becoming technology neutral.
Sanjeev: Google is doing lot of work with law awarement agencies.
Shailash: Working with IAMAI. Going to cybercrime, police regimes. Conduct dgitial day. Internet and how it works. Seeing great results… Be net smart, go to school.. meet with parents, educators about safe, valuable, fun use of internet for children. Tech is not high fixed price cost. Potential to outpace knowledge level of broader population is tremendous. Services available on internet are net positive for society. We are at tenuous juncture in india where people needs to start seeing that and simulate it. IAMAI and industry needs to continue promoting it.
Ramaraj talked about the dot bidding opportunity coming up and talked about is a very exciting time for young entrepreneurs to utilize it and build businesses around it.
Sanjeev: Has ecommerce lived up to its potential?
Mahendra: Ecommerce not succeeding because of missing backend infrastructure and logistics. Mobile may promote growth of ecommerce. Mobile payment will help stimulate it.
Sanjeev: Future of mobile payment and mobile banking?
Shivkumar: Certainly there, don’t know when.. For every 100K people, u have 7 ATM’s, 14 banks, 25K phones. So, it has to happen. Some genuine concerns at consumer end (Tech and security) and regulatory side. As soon as they get resolved, market will grow.
With those parting comments we come to an end of this session. As always, it was great fun live-blogging the session. For any questions and comments, please write to us at info@omlogic.com