Rediff revenue slides 24% to $3.84M in Q2, e-com revenue up 61% Y-o-Y; Net loss shrinks
NASDAQ-listed Rediff.com has seen its revenue drop 24 per cent to $3.84 million for the second quarter ended September 30, 2012, over the year-ago period (but rose 4.6 per cent sequentially), led by the fall in India online revenues. Net loss in the period decreased to $2.34 million from $2.64 million in the same period last year.
The company's core online advertising business in India has shown quarterly sequential growth of 7 per cent in dollar terms, in the second fiscal quarter of 2012. However, total India revenues, which include online advertising revenues and fee-based revenues, declined by over 25 per cent to $3 million in Q2 over the year-ago period.
Fee-based revenues include revenues from online shopping business. Revenue from Rediff.com's e-commerce business grew 20 per cent on a quarterly sequential basis and 61 per cent on a year- on-year basis while maintaining a positive margin of 12 per cent.
The US publishing business, which accounts for a quarter of the revenues, also saw a dip in income in Q2.
"There continues to be difficult economic conditions which have curtailed our near-term growth, but we believe the promise of the broadband revolution remains very much a reality. We believe that the modest growth we are seeing in our India online and e-commerce businesses, and the uptick in demand for our News Search and Rediffmail offerings, are early indicators that our strategy of positioning Rediff for future growth is beginning to gain momentum," said Ajit Balakrishnan, chairman and CEO of Rediff.com.
According to him, the firm continues to invest in areas identified, such as News Search, e-commerce and local TV advertising, which will successfully position Rediff for the future.
Local TV ad services are now available in 10 Indian cities and Rediff's e-commerce offering currently includes 172,000 SKUs, which represent 24.6 per cent increase over the comparable second quarter last year. The number of vendors with whom the company now works, also increased 22 per cent for the same period.
Rediff's news and information service is now deliverable on apps for platforms such as Android and Windows while the flagship Rediffmail service is available on various mobile platforms, such as Symbian, Java and Android.
Balakrishnan said, "While we wait to complete the rollout of our new products and services, and for the economic situation to improve, we are instituting very tight controls on our expenses. Our cash burn of $ 0.9 million this quarter is half of the average of each of the preceding four quarters, and our operational expenditure is a third lower than the same period last year."