Rediff (NSDQ: REDF) has announced earnings of $32.25 million for the fiscal year ending March 31st 2008 (FY08), up 13 percent from the previous fiscal. However, while the companys registered a profit of $5.03 million, it was down 38 percent from $6.99 million from FY07. This, despite an increase in interest income for the year, at $5.51 million this fiscal, from $3.73 million for the last fiscal. Importantly, operating expenses increased by 26 percent to $21.86 million for FY08, up from $17.33 million for FY07. The company says this is primarily due to higher bandwidth, advertising and marketing expenses, stock-based compensation and payroll costs.

India Online revenues, which are key, increased 14 percent at $23.35 million for the year. Operating EBITDA for the company was $4.39 million, down from $5.93 million for the previous fiscal.

For the quarter: revenues were $9.06 million, with India Online revenues contributing $7.18 million, a 14 percent increase from the same quarter, last fiscal. However, for the third quarter running, net profit declined year-on-year - at $1.02 million, as compared to the $2 million the company made in Q4 2007. Some notes from the press release:

Advertising: Rediff had 250 advertisers in the quarter, adding 20 during the quarter. Consumer Finance, Employment, Insurance, Matrimonial and IT products accounted for 53 percent of their advertising revenues. The top 10 advertisers contributed 38 percent of their advertising revenue, compared to 55 percent during the same period last fiscal.
Video Search: Rediff launched video search, which allows users to find videos across 80 sites, with over 1 million videos.
Vertical search: Fare Search now includes fare and reservation status for trains in Railways. Job search now has dedicated feeds from Naukri, Monster India and Clickjobs. Interestingly, Rediff also launched Car and Bike search for Delhi and Mumbai, which allows users to send test-drive requests to automobile dealers via SMS.
Classifieds: introduced a new version of Rediff Classifieds. There are currently 450,000 listings. Rediff also appears to be targeting smaller advertisers now - they’ve established a Pay4Clicks program with over 50 channel partners across 7 Indian cities.

Update: During the earnings conference call, Ajit Balakrishnan, CEO of Rediff said that competitive activity in India has increased, with the launch of MySpace and YouTube, apart from a number of VC funded startups. Rediff believes that that correct response is “to continue enhancing existing platforms, strengthen our ad platform and expand our ad sales reach.” Nothing else to report from the conference call, which was cut short by a connectivity issues. The system wasn’t accepting questions, though I had a few.

• Earnings: Rediff Q3 Revenue At $8.53 Million; Pricing Pressures; No Buyback