Bangalore - The tremors of the post-dotcom crash appear to be now hitting even those with extra-deep pockets as analysts predict the survival of less than half-a-dozen big ones by mid-2002.

The conversion of media baron Rupert Murdoch's indya.com into the online face of his STAR TV network after the third and final layoff last week is not an isolated case. The "serious problems" that the other big players are facing have left industry observers and analysts to "realistically assess the completion of the dotcom crash" in India.

"The major chunk of the dotcoms would disappear in the coming year. The process has actually just begun. We can safely say today that there will not be more than half a dozen dotcoms in India by mid-2002 or, at best, 2002-end," a top official of one of the big dotcoms who did not want to be identified told IANS.

Officials of other dotcom companies agree. They are convinced that the writing is on the wall for many, not just for those who have failed to adopt offline businesses and "monetise every eyeball".

"It is also for those who have not managed their revenue yielding operations well in their parent company or have enough money left for the next two quarters only. One would not like to mention names, but they are also the popular ones," says one analyst.

"Only those with extra deep pockets have survived the last one year. Now it is time for even these moneybags to either scale up monetisation, a difficult proposition under current economic conditions, or just close shop. The scene is really that bad. As a matter of fact, it is worse than the body shoppers in the IT (information technology) sector," says a fund manager of a major venture capital firm.

The assessment may appear harsh, but in the dotcom sector, or whatever remains of it, realistic assessments are becoming the order of the day.

Is India really ready for online business?

"Many entrepreneurs tried to cash into what looked like a hot easy money market. Those dreams melted with the market," says Sunil Lulla, the outgoing CEO of indya.com.

The melting process began from day one. In a bid to follow the traditional business model of advertising revenue of newspapers and attract eyeballs, dotcoms advertised heavily, leading to soaring revenues of newspapers as well as advertising agencies.

But studies showed that very few clicked on the ad banner on the Web sites, dashing the rupee dreams of not just the dotcoms. The advertising agencies made their moolah but are facing the music for a different reason one year down the line.

"Today, many of the middle level advertising agencies are feeling the pinch more because their old clients, disgusted with their total focus on servicing dotcoms, are refusing to return, forsaking the good service of small and even tiny ad agencies," says a former office bearer of the Advertising Club of India.

"The choice before many, then and now, was simple. Get acquired and be an extension of the brick and mortar sector. From 'let me do everything,' it has become a question of sharing, outsourcing and total focus on core competencies. Basically, a revenue-yielding model," says Prashant Prakash, president and CEO of Netkraft Private Limited, a Web solutions company.

"It was crazy at that time. But there are many survivors. Take e-gurucool. com. It started as an online venture, built its brand and went heavily into offline operations. Or, for that matter, indiaproperties.com. Today, this online venture has developed affiliate models with fees coming in from brokers as well as builders," says the CEO of a major dotcom.

There are also the likes of indiainfo.com, written off nearly a year ago.

"But we have survived. From content management, we are now into product management. We are spending as much as we earn, just the opposite of what we did one year ago. We focussed on getting into areas where there was a revenue opportunity. And it has helped. We will be breaking even in the next quarter," says B.G. Mahesh, CEO, indiainfo.com.

"To build a sustainable profitable base, the Indian market needs to mature to 25 to 30 million users (from the current four to five million Internet users) before it provides the foundations for a multi-player profit pool," says Lulla.

So, with so many fingers in a small pie, this could well be the beginning of the last phase of the dotcom crash, analysts concur.

By Imran Qureshi

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