"We realized that to bring traffic, we had to attract communities," said Navin Mittal, business head of The People Interactive Group, which runs Fropper.
Fropper (a combination of friend and hopper) itself is an offshoot of a leading Indian matrimonial site, Shaadi.com (the word shaadi means marriage). With 3.5 million users, Fropper encourages users to be less formal and use colloquial Hinglish, a blend of Hindi and English.
But the big bucks are pouring into Reliance Entertainment's Bigadda, a late entrant that launched in September. Reliance plans to invest US$100 million on the social networking site and BigFlicks.com, a video content site, over the next five years. Said Rajesh Sawhney, president of Reliance Entertainment: "Bigadda is our preparation for a future where social and traditional media will co-exist and create new options of entertainment."
A me-too site offering uploading and sharing of video and photos along with some privacy options, Reliance's social networking site is already claiming big numbers--a million users this quarter. Reliance has signed on photographer Atul Kasbekar, singer Shankar Mahadevan, and Bollywood starlet Dia Mirza to attract more users.
These offerings by social networking sites have yet to excite advertisers. Online advertising is the predominant revenue stream for social networking sites. "It's a huge opportunity for advertisers," said V Ramani, managing director of Connecturf India, a Mumbai digital marketing solutions outfit. However, since users sign up with aliases, "There's still no clarity on the genuineness of the user base."
Internet advertising is still tiny in India's US$3 billion ad industry, with just US$100 million going to online ads. However, industry sources said online advertising is growing at a 75 percent annual rate and nearly half the online ad revenue is driven by youth and community sites.
Looking at the mobile marketplace
At this point, Minglebox's Iyer, too, is playing it safe. Even though she said her business model is based on online advertising, product development is her immediate concern. Sequoia also wants to wait. Added Chadha: "Over time, we will put advertising on Minglebox to generate revenues, but we are in no hurry as the site is not very expensive to run."
Minglebox and other social networking sites, meanwhile, are planning to extend their content for mobile use. That is because while social networking on the Internet in India is still in its infancy, it has clearly caught the imagination of those in the communications industry. India's mobile operators are looking at the sites' user-generated content with interest, envisioning revenues from offering them as value-added services to their subscribers. India already signs up 7 million new telecom users every month.
More than a fad
According to a report by the Telecom Regulatory Authority of India (TRAI), the number of Indian consumers connecting to the Internet via cell phones more than doubled, to 38 million from 16 million just last year. Today, almost all the telecom operators, such as Vodafone, Essar, Bharti, and Tata Teleservices are considering adding social networking as an additional service for their subscribers.
Meanwhile, industry leader Orkut is determined not to let competitors infiltrate its user base. An Orkut makeover in August sports Hindi transliteration and a user interface in five Indian languages: Hindi, Bengali, Tamil, Telugu, and Marathi.
Surely the Indian startups will have difficulty competing against deep-pocketed players like Orkut, and since there is very little to distinguish between many of India's social networking sites, an industry shakeout is likely. But the Indian entrepreneurs are optimistic. Said Fropper's Mittal, "This is not a fad, it's real."
With Manjeet Kripalani in Mumbai.
Play video
There are currently no comments for this post.