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?

39 comments:

s4ur4bh said...

Hi Anurag,

I would like to digress a bit.

I think its not technology at the core, rather as we move to open standards and free availability of source codes, technology would become more of an enabler (or means) rather than being at the core.

Yes, I agree that people with deep pockets do put tons of money behind these ideas and algorithms and it is very difficult for a small player to complete with them.

And you hit the nail on the head when you said that Indian companies don't have the mind-set to compete with offerings that are purely tech led.

Finally, talking about local search, online classifieds etc, I think they have a long way to go before they truly become effective. Currently the users that they have are mostly biased and same users are creating content everyone on the web. It will be effective when Internet becomes mass and people participate rather than just read.

Thanks,
SG

Subho Ray said...

Hi Anurag,
I presume that your piece is based on the fact that web 1.0 are making big money in India....

Subho

Anonymous said...

Hi Anurag,

I agree with you on the local strength being a big differentiator if done right. Here the focus of the management and the strength of their vision comes into play. A case in point is iXiGO - a completely home grown Travel Search Engine which has been received global recognition (and more importantly, the eyeballs) in the short span since its launch.

Thanks,

TI

Webdunia said...

I too agree with your point that the large players have enough potential as far as technology,scalability and infrastructure is concerned.

But local content carries a lot of value, people love it. And we indians know better what Indians want.

Also with the level of broadband penetration in India, it surely will play a crucial role for indian companies.

The india organizations have been striving a lot since so many years due to the low penetration of internet.

vishywashi said...

I think, in the long run there is money to be made. The competition from global Web2.0 sites is fierce. Homegrown copy-cat Web2.0 models can work in only some niche areas. There is potential, as only some UGC sites will work (example - video uploading is still not popular, as limited people have access camcorders).

Anonymous said...

hey! Anurag,
I think you've summed up the general feel of the net industry - self doubt.

Even in the recent IAMAI conference, there were more self-doubts floating around(and being handed out from the dais).

I don't agree with you, for the sake of optimism alone :) While every copycat idea doesn't stand much of a chance, it is also important to understand that there isn't a critical mass of people 'thinking' on what would work online for the indian masses. I think every industry needs one big story to sell and invite people/good people to be a part of it. Should we not take it upon ourselves the responsibility to ensure good ideas are talked about and get more visibility into impressionable minds?

We need to spread a lot of enthusiasm, that's where the urge to come up with the next big idea would come from.

Anonymous said...

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

Mine Answer to this question is "lets innovate not replicate" the day this gonna happen,Indian companies will start making money.

Sandeep Amar said...

Anurag sounds right when he makes this supposition, the localized solutions is the way to go for Indian Firms, which are technology based engines. I think he has highlighted the problem very well, and it is a challenge for us to start conceptualizing engines from both “tech” and “global need fulfillment” perspective. I think problem highlighted is genuine and the act of "highlighting the problem" should be taken as a positive act. I think India has the firepower to bring in next stumbleupon, bebo or slide. Hoping for a change in thought and to get a global engine from India pretty soon!!

sycamore said...

Hi Anurag,
One of the integral elements of being a web 2.0 site is user interaction and involvement.

Investments and Fundings by biggies alone will not be able to match the combined strength of user generated content/involvement and collaboration.

And precisely why sites like Facebook became a success (And if I am not mistaken sites like My Space and Friendster rules the roost in those days). A large part of feature enhancements and involvement/interaction attributes can be linked to their open architecture and the fact that they allow you and me to develop and use applications.

I think that the next step towards creating a disruption is 'Collaboration" feature. If a small site can allow you to collaborate and create something useful; it will beat any big generic community site any day.

Imagine a community site where you are able to collaborate and create a full length movie, or a music video or conceptualise a busines idea, or generate fund for a cause.

Sites with applications that allow you to colaborate with like minded people, create a meanigful product/service and help you sell/distribute the same, are the web 2.0 sites of the future.

Anurag: You are right, In India we do not see very intelligent stuff happening at the moment, but I guess we all now have a hang of what will work, and I hope that we would see some good stuff pretty soon.

broadcalling said...

hi all

i would not put the blame solely on the tech companies, there is innovation out there but for a startup or an individual to get a foot in the door is extremely frustrating. Banks, VC's , clients, colleagues, friends are very wary of new applications.

Everyone wants to first see it work, make money, get users on board before they look at you. This negates the innovation ecosystem completely. The IDEA has to be nurtured first - the rest will follow if the IDEA itself is good.

The solution i believe is for us to help people we know who are innovators in any way that we can rather than just talk about what has to be done and play the blame game.

give him / her a patient hearing, connect them with your network, if you have a large office space give them 2 tables, access to hardware / bandwith helps. Whet their business plan and encourage them without thinking of "what does this mean for me"

try it my friends - it works

cheers

akshat

Sandip Maiti said...

Anurag you make some excellent points, and so do many of the followers to your post. There is a reason for many copycat services emerging out of India. No one knows what makes a hit with consumers, so (in the absence of funding) many indian startups feel safe to copy a service idea, that is already proven to be a hit with consumers elsewhere. Also it is easier to convince a VC about the viability of the service and there is a clear acquisition strategy in place.

Sometimes this model works and sometimes it does not, because the social nature of consumers differs from one region to another.

We launched a service called www.postalz.com recently where we dared to innovate. We developed a concept of exchanging online postcards as a rich communication media. We did not get seed funding for this idea, because no one wanted to take a risk. Yet we walked down this path, because we were fired up to innovate out of India. Unless you try, you never know if the concept will succeed or not.

In the Bay area innovation thrives because people willingly give small amounts of money to teams to try and develop their wild and whacky ideas. While giving money they know that 9/10 of these companies or more will fail. Unless the indian venture ecosystem is willing to fund wild ideas by seeding them, we will never see innovation take off in the true sense.

Do check out postalz.com and see the many little innovations we could build inside this service.

Sandip

Everymatter said...

Mot of the Indian companies follow the trends set by big portals like facebook, orkut etc. and none of the big IT company is really working to launch the social networking site to exploit the potential of Indian market.

Moreover they should not work on the concept given by global companies and must provide the concept, facility, technology and analyze the trends of Indian society so that the project can be specially designed according to the Indian needs.

Robin Jacob Abraham said...

I feel we are jumping the gun.There has definitely been a movement from Orkut to Facebook but its restricted.Infact I have had views where People say that Facebook's all cluttered and not user friendly.Many other have profiles on Facebook but rarely use it.In the 18-25 age profile where both Facebook and Orkut are popular in India,its the applications that differentiate.With Open Social,we might see that change as well.

kartik said...

Indians have to leave their comfort zone in order to make it big.......

Take any tech genius in US....they made it big because they believed in themselves and so gave everything up in their pursuit of dreams

Mindset has to change

Sneh@l |\|imje said...

hmm...I feel a Web2.0brand has to be supported by a good offline presence, infact that is what should be the backbone. Otherwise, its easy to perish, once the hiphoppers switch to other site the entire crowd will.
Online thing portal is necessary but whooaa very unstable technology is getting jazzy, designs are getting more snazzy... your offline presence just gives you the cushion to learn and better those...and yuppy, u r at par.
And if u r saying..."mann offline thingy is very tough...i just wanto span,scrap,email for free"...pack your bags, this is hard turf.
Money - its tough nut to crack... you just need to stay there and importantly deliver.
Google, facebook, have awesome offline presence...think! nyways google search is worst SEOed site, yet most visited!

-m co-founder @ hellointern.com , thirdie at iitbambai

Anonymous said...

Got to see this article on Web 2.0 & thought of penning down some thoughts on my mind.

I personally think that Web 2.0 has tremendous potential in India. This statement is not a over-dose of boasting as i strongly believe that there a lot of potential in making our systems go web.

Be it anything from jobs to house search everything is easy when you have internet. In fact, i got across www.ninthcafe.com which seems to be doing the job really well. I am pretty confident that WEb 2.0 will make its mark in India.

YO! Creations - Nikihl said...

gud one sir......So how exactly DGM is using these social networking portals for building brands.
I know quite clearly he concept of SEM,SEO,Affiliate marketing n all.....but how about the social media marketing...how is this exactly done?
How corporates r using these portals to build brands, or for generating leads/sales etc.can u please throw some light on it?

Sandeep said...

Hi Anurag,

This is a really informative blog. I got in here from your LinkedIn page. I wanted to get in touch with you to discuss something professionally.

Could you let me have your contact details?

Best,
Sandeep

Pavan Metri said...

In terms of Language aspects and in terms of rural massses in which more than 70% of the population of India lies I am sure that Indian startups will make a big move in the Internet space in the Indian market.

Anonymous said...

Excellent post.
I would only like to add that the Web 2.0 brands like Facebook, Joost, twitter etc. are still evoloving in their business model. These brands at present are focussing more on building communities and at the same time exploring ways to make use of these communities for business benefits. Very few of these companies are having Indian specific strategy and might lag behind in building local communities.
Indian Web 2.0 companies, inspite of lagging in technology can hope that once they are able to successfully build local communities, some of the leading players like Google, MSN would buy them out at high valuations.

zazo said...

Hello Anurag,
I read the article of yours which made me think about "when internet came in use for common people?" Its hardly 10-12 years old story and in terms of technology, advancement and development India is still far some 10 years far from those developed countries. I spend my last 6 years on internet researching on different fields and meeting different people mostly(12-16yr old)computer programmers who made there room a "cell" sitting for long hrs on computer doing research and development work from school projects to there favourite gaming portals.
On the other side i would like to share a story that few days back i went to one shop i usually shop there for grocery items, i have always internet in my mind so that day one small about 14yr old kid probably the owner's son was sitting on the counter and just like that i asked " do you know yahoo?" the answer he gave me was unexpected and stupid but it cleared my view that still its long way to go for internet to come into the life of local Indians.
We are best all over the world, if i know lots of intelligent people and highly educated people are visiting this blog everyday so they know that most of the doctors practicing in US are from an Indian origin, NASA has approx 30% of indian employee so if you say that our standards or technology dont meet those big web giants then i must say that its just a matter of time but not money. For example see zapak.com for nothing he is giving 100 and 1000 of rupees because its owned by ambanis, check indieeblogger.in, bigadda.com, kazoonga.com and check digitalpoints forums where you will get more than 50% indians selling domains, websites etc. Its shows that sun of internet and online marketing is rising. We have to wait for that.
By the way i too own some blogs and forum communities, and one i would like to share is www.orkutheroes.com which shows the positive side of social networking.

Gapu said...

Hi Anurag,

Your posts are really informative and interesting. I am also working as a online marketing manager.

I would like to disucss something with you professionaly.

I would appreciate if you mail me your contact details.

Awaiting your response.

SVA Search said...

Hey that's an interesting post...The one common thing that i see in all indian internet startups is that they are all not original. They hav been ripped off from popular sites like craigslist, expedia...off the top of my mind. Hope we start being innovate soon !!!

MySpace Design said...

Great article. Very informative and insightful. Glad to have stumbled on your blog.

Randhir Priyadarshi said...

Nice post Anurag. You have touched on a subject that genuinely needs attention.

Chris said...

It’s a shiny, new dance floor, but how many can dance? The Web 2.0 market in India is still struggling for direction and funding, though the start-up scene in the Indian consumer space has been vibrant. Yet, the number of Web 2.0 companies focused on the enterprise or business space can be counted on one’s fingers. A majority of players are active in areas like social networking sites (SNS), blogging, and document and multimedia sharing in the consumer space. A mere 12 of the 67 India-focussed websites studied by research firm IDC have a clear enterprise or business-driven model to their operations, while 55 have a consumer focus.

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Bobwilliams
social marketing

Rajeev said...

Hi Anurag,

I have a launched an India specific website http://www.brandsindiaonline.com.
This website provides India specific web directory related to products services offered by different brands(Vendors) in India. Apart from that this site will also provides deals,discounts and promotional offers in different products in India. Let's see how this web site works.

Thanks,
Rajeev

Ranjeet Kr. Vimal said...

Hi Anurag,
This is ranjeet a final year student of CSE IIT-Bombay, an avid tech. blogger on internet.
Sir, I want to specify some points:
1) orkut, facebook, myspace, hi-5 and many more..these are the part of web2.0. these are called social networks. Web2.0 includes other thing also like wiki, video streaming, blogs..ect.
Sir, this is not the power of money, this is the matter of opportunity. social network is something which grows exponentially. it like a chain reaction. they started these thing early, when indian startups came ,they hd already acquired the indian market. and its very obvious, if u r my frnd and u r on orkut then it has high probability that i ill join orkut.
2)y google bought youtube which is also a part of web2.0. remember youtube had no money initially, it was started as a PHD project. then google copied this idea and started google video. but google didn't able to migrate single user from youtube. Although youtube had no money to spend. only 8 person were working for youtube dat time. So, money doesn,t matter. The thing that matters is opportunity and innovation.
3)In USA they hv, wt we call "bana banaya market" and money in india there is nothing..there are very few people who can access the net. more than 90% villages dont hv electricity, internet is out of matter ...etc
4)u might heard abt bigadda.com ..this indian web2.0 site is making million.
5)ibibo.com is doing very well..
i know that in india things are not easy.. indian web2.0 will hv to be aggressive and innovative in order to beat those american sites..
thanx :)
Ranjeet
http://bugsnerror.blogspot.com/

neal said...

The biggies can score very easily over small Indian start-ups. A case in point is people migrating to Facebook away from Orkut.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 .
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JNNY

Social marketing

rose said...

Web 2.0 has caught the fancy of Indian’s and a good indication is when the recently held India Brand Summit had a session exclusively called web 2.0 and which had the who’s who of the Internet world sharing their opinions on what we can expect in the Indian Online space in the near future more importantly in the web 2.0 arena.
-------------------------
rosejenifar
Influencer

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