NASDAQ-listed Rediff.com India Ltd. (NSDQ: REDF) publisher of Rediff.com and US-based India Abroad newspaper, today posted a net loss of $8.86 million (Rs41.89 crore @ Rs47.29/dollar), compared with a profit of $0.90 million during the year ago period on decline in online advertising and depreciation of the Indian rupee vis-a-vis the US dollar. Total Revenue dropped 50.44% from $9.06 million to $4.49 million. The figures have also been affected by a one-time ‘goodwill and other impairments’ write down of $6.91 million in the print business.

For the year ended 31 March, the company swung to a loss of $11.26 million from a net profit of $4.92 million during the previous fiscal. The company said the rupee depreciated 25% during the year under review. ““The continuing economic slowdown in the travel, jobs, matrimonial, shopping, consumer finance and real estate sectors in India continued to affect online advertising revenues, in particular revenues from other online companies in these industries,” chairman and CEO Ajit Balakrishnan said in a statement. The full financials are here.

During a conference call this evening, Balakrishnan said this was a “very challenging time for companies in India that are dependant on online advertising”. At the end of the fiscal under review, the website’s registered userbase stood at 78 million, a 19% increase from the year ago period. The company has $45.6 million in cash and liquid assets at the end of 31 March, a 2% increase from the beginning of the quarter. The company has cut its head count from 350 to 325. “We have hired close to 25 tech people and reduced around 50 from all the other departments, so in a sense we are becoming a more tech-oriented company,” Balakrishnan said. Head count cuts helped reduce operating expense during the quarter by 24%, from $6.12 million to $4.63 million.

New interface:

Rediff is testing an interesting new interface (left, click to enlarge) at ia.rediff.com and world.rediff.com. “It’s a clutterfree environment, facilitates access from mobile phones, has less intrusive advertising and makes use of collective intelligence to aid content discovery,” Balakrishnan said. This would result in an increase of $1-1.5 million in operating expense for the next few quarters and revenues from the international sites will be depressed in the short term. “But we are committed to creating properties that delight the customer. Money will follow,” Balakrishnan said, adding that he has spent 80% of his working time in recent times on the new interface. When asked if the company was considering introducing the new interface on the main homepage, if it proves to be a success with international traffic, he said: “I hope so”. “We have to test and perfect several new social features in the new design,” he added.

Investments:

The company has written off an investment of $125,000 in Vakow.com, started in 2007 by IIT Mumbai alumni Rahul Gupta and Amit Upadhyay. “The two young people who were running that site have decided to move on and take up other jobs,” Balakrishnan said, adding that it is the only investment that hasn’t “gone as where all of us thought it would”. Balakrishnan was optimistic about the company’s investment in Bangalore-based Tachyon Technologies (of Quillpad fame), where the company owns 26% and mobile app firm Eterno Infotech, in which Rediff owns a 40% stake. Eterno has developed a product that allows newspapers to push their content on to mobile phones, Balakrishnan said. Rediff has also invested in Examville.com, a US-based study aids website, he added, without disclosing the investment amount.

Products:

Usage of Rediff’s video-sharing service iShare has improved dramatically, Balakrishnan said, adding that the company has licensed more than 100,000 songs and videos from music label T-Series. But the company is not introducing advertising on to the service in a hurry. “I’m hesitant to do anything more than a limited amount of prerolls,” he said.

The user base of Rediff’s financial portal Moneyviz was closing in on that of moneycontrol.com, he said.

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