Friday, January 11, 2008

The future of Indian Web 2.0 brands - will they make money?

There has been a plethora of almost me-too brands that have mushroomed in India all of them inspired by success of brands like Orkut, Facebook etc.

I feel that most of the Web 2.0 brands have ‘technology’ at their core. Take the case of Web2.0 vertical - social networking – which has Orkut & Facebook as the leaders or Global /Generic Search Engines where the best technology offering like Google & Overture are the undisputed leaders in terms of share of mind & wallet. Similar case is of photo sharing & blogging sites.

The biggies can score very easily over small Indian start-ups. I am not sure if an Indian start-up can match tech prowess / capabilities of a Google or a Facebook who may have millions of dollars just to invest in technology & product engineering. I personally feel that Indian companies do not have the capabilities, might or mind-set to compete in offerings that are purely tech led.

Another issue that a Web 2.0 brand will have to constantly face is migration of people to newer offerings as and when a better technology offering with better bells & whistles come in. A case in point is people migrating to Facebook away from Orkut.

On the other hand, where the differentiator is “Compelling localized offering (localized / topical content / local buzz) – there is a huge potential for Indian start ups in the Indian market. Vertical like Local Search Engines, Travel portals, Online Shopping comparison sites, online classifieds, niche community sites, horizontal /local news sites etc. have a huge potential to scale up in India.

However, I see that almost all Indian Web 2.0 companies have not got any really well thought out differentiators that can set them apart on parameters other than technology. In light of this the BIG question is - will the Indian Web2.0 brands make money for their promoters?