Mumbai, Sep 15 - Indiainfo.com, an India-specific horizontal portal and e-commerce site, has called off its multi-billion rupee, content-sharing deal with Videsh Sanchar Nigam Ltd. (VSNL), the country's international telephony carrier and the largest Internet service provider (ISP).

In a letter to VSNL managing director Amitabh Kumar a few days ago, indiainfo said it did not want to renew the memorandum of understanding (MoU) entered into between the two companies earlier this year.

"The MoU between VSNL and us was for a period of three months and extendable for a further period of 30 days. We, have, however, communicated to VSNL that we want the MoU to lapse," Madhu Kodali, the cofounder and chief executive officer of the portal, told India Abroad News Service.

As per the deal between the two companies, the indiainfo site would have become the de facto homepage for VSNL's Web site -- a move primarily aimed at cornering the eyeballs of VSNL's Internet subscribers.

For this, indiainfo.com was to pay VSNL Rs. 2 billion in cash, apart from a share of revenues generated by the portal.

Senior indiainfo.com officials said that during the tenure of the MOU, both companies were to finalise the final agreement, but the negotiations became protracted. In the meanwhile, the market opportunity faded away, making the deal "impractical and unviable," the officials added.

According to the VSNL managing director, the state-owned utility is now looking for a new partner, whose site would be the default home page of VSNL's subscribers.

"The deal is definitely off, and we are looking at several alternative proposals," Kumar told India Abroad News Service. He however refused to go into the reasons for the deal coming unstuck.

Several content providers, including a leading newspaper publishing company, have already sounded out VSNL for making their respective Web sites the default homepage of the ISP, VSNL sources said.

Kumar also told IANS that the new content provider, who will tie up with VSNL to develop the joint portal, will have to provide an auto dialer for VSNL's subscribers, which again was a part of the deal between indiainfo and VSNL. At present, VSNL's subscribers are given only a customer identification tag and password and no default home page to go to.

The deal with indiainfo was touted as a win-win deal for both parties. While VSNL was to get sizeable revenues from the deal, indiainfo was expecting to benefit from the nearly five million subscribers who access the Net through VSNL.

Kumar however did not think that VSNL would suffer losses from the deal coming unstuck. "E-commerce has not really taken off, so it is difficult to say if we have lost because of the deal coming off," he said.

By Shiv Kumar, India Abroad News Service

Home

More...