Global heavyweights, Indian veterans, and vern newbies are fighting to be your default homepage. Who'll win?

By Pooja Garg

There's always a Version 2.0. And 3.0. Software's reigning axiom, and the reason for the existence of a battalion of code-crunching Microserfs, works for the Net too. There's a second-, third-, and fourth-generation to everything on the Web: search engines, portals, vortals, even, competitive battles between Netcos. Take the last: the Indian horizontal portal arena was an island of calm in March: there was undisputed market-leader Rediff, and anxious wannabe, Indiainfo. Shift to May, and things are different. Very different.

Emencee portals like Microsoft's msn (www.msn.co. in, a Beta site, to be formally launched in the next two months), Yahoo! (to be launched in the near future and in the hiring mode right now), and Lycos (scheduled to go on-line soon) are a click away from entering the market. Rediff and Indiainfo have gone vern: Rediff has news in Hindi, Gujarati, Tamil, and Telugu; Indiainfo is available in Tamil, Telugu, Kannada, Hindi, Malayalam, and Gujarati versions. And Microland's Indya (www.indya.com) made a high-decibel entry by taking over the Sunday edition of The Times Of India's cover page on April 16, 2000.

This, bleary-eyed netizen, is the sequel: PW II (The Second Portals War). Only, this time around, the real battle will be, not between the features in the armoury of each side at war, but their business models. And the strength of their brands.

That puts Indian sites at a disadvantage. A survey of the Indian Net-using population conducted by the International Data Corporation (IDC) in August, 1999, threw up the fact that Yahoo!, not a home-grown portal, was the most popular site. However, a clever business model-especially one like the portal-but-not-really-one used by America Online (AOL) (which Satyam Infoway is attempting to transplant here)-can, often, out-leverage brand-equity. BT. dot.com reviews the business-models of the main players in PW II.

The access route. On the Web, nothing succeeds like access. AOL, the company everyone loved to hate but couldn't do without in the mid 1990s, acquired its Net-superpower status by building on a foundation that had little to do with content or e-Commerce. Today, it has 22 million subscribers.

Access is the most critical choke-point on the Net: a company that controls access, then, is very high on the Net food-chain. Agrees Ajit Balakrishnan, 52, CEO, Rediff: ''Access is a great starting-point. Once you achieve a critical mass in terms of subscribers, and can boast a high retention rate, there's no limit to how you can leverage this (subscription) base.'' Which is exactly what companies like Satyam Infoway and Mantra Online are trying to do. Satyam is a Class A (national level) ISP, and claims a subscriber base of 1.50 lakh (April, 2000). The access provider's home-page is the default home-page for subscribers. Although users have the option of defining their home-page, few do.

And fewer will if the access provider has a portal that compares with what the best of the competition has to offer: utilities like search, e-mail, and chat; content; communities; and commerce. Avers Padma Chandrashekaran, 39, Vice-President (On-Line Business), Satyam On-line: ''Access may, at this point of time, contribute the most to our revenues, but, gradually, earnings from other revenue streams that accrue to us because we are a portal will kick-in.'' Over time, Satyam expects the subscription: non-subscription break-up of its revenue to be 51: 49.

The sources of revenue that an access provider can tap include advertising, affiliate-commissions from e-Commerce sites to which it channels traffic, and rentals from the electronic store-fronts that it hosts. But is it only ISPs that can leverage the access card?

Not quite. A portal can enter into a strategic alliance with an access provider to achieve the same objective. Indiainfo's alliance with VSNL, which, with 3,80,000 connections, is still the country's largest ISP, is one such. Explains Sunil Rajshekhar, 43, President, Indiainfo: ''This arrangement provides us access to vsnl subscribers across the country. Now, their default home page will be www.indiainfo.com.'' Or, the alliance could be between a portal and a computer manufacturer, wherein the latter's Net-ready PCs have a key that provides a one-touch access to the former. Rediff has forged just such a tie-up with Compaq. Net net: business models built around access are, perhaps, the strongest one can hope to find on the www.

The content route. Stickiness is all. And the bulk of stickiness comes from content. Horizontal content, vertical content, vern content, mobile content, and just about any other form of content that interests users. Content was the moving force behind Satyam Infoway's acquisition of Indiaworld, and Indiainfo's, of musicurry. In the click-now-or-never world of the Net, a company's need for content is immediate.

Thus, rather than set up an internal cell that can develop content, several portals prefer to buy outright, or enter into some loosely-defined alliance with companies that have extensive content. Says Vinay Chhajlani, 37, CEO, Webdunia: ''The make or buy decision is strongly skewed towards buy when it comes to content.'' Webdunia has been providing Hindi content to Satyam Online. But companies usually complement outsourced content with lots of their own. Thus, Indiainfo has a 150-strong content team and proposes to increase its strength by the end of the year.

The content fetish isn't surprising: content is the most powerful differentiator a portal can hope to possess. That explains the haste with which Rediff and Indiainfo have launched language versions. The country's newest portal, Indya, is betting on content to build its franchise; it has nine channels: cinema, singles club, news, women, travel, e-campus, e-cards, music, and astrology. And it hopes to bundle in everything from the mundanest of utilities to e-Commerce. Explains Sunil Lulla, 39, CEO, Indya.com: ''We promise a unique Indian experience in terms of content as differentiation is key for Indian portals. And, we have a strong technological backend which allows us enormous scalability.'' To that end, the portal business is very much like the traditional media business: if content is the differentiator, a new competitor could emerge any time.

A content-dependent portal can hope to have the same revenue streams an access-driven one has. Charging for content is out, but by leveraging its audience-a function of its content-a portal can attract advertising, serve as an e-Commerce affiliate, even be an on-line mall for an aggregation of digital store-fronts.

However, content-driven portals need to invest heavily in brand-building. Only then can they hope to use their unique content to attract the right audience and create a community. Agrees Indiainfo's Rajshekhar: ''Only content can ensure that you have a bunch of like-minded people crowding your Web-space.'' Everything else, commerce included, follows. But building brand-equity is an expensive proposition. Indiainfo's promotional budget for 1999-2000 runs to 15-20 per cent of its total expenditure; and Indya is rumoured to have spent a million dollars for its promotional blitz in The Times Of India.

Clearly, companies that are able to segment the horizontal portal market, thereby reducing their direct competitors, stand to benefit. Thus Webdunia hopes to cash in on the fact that it is the first Hindi-language portal to build a franchise. And Indiainfo hopes its mobile channel will be able to become the country's first portal for cellular phones. Says Webdunia's Chhajlani: ''Our target is the Net-user who is more comfortable in Hindi. In the next five years, the number of people who use vernacular portals will be higher than those who use English-language ones.'' However, even targeting segments of the universe is an investment-intensive process. Net net: only companies with deep-pockets can hope to succeed with business-models built around content.

The alternative-content route. The Web was created for contrarian business models. And a few portals have been quick to realise that. Latecomer msn outsources its content. News, for instance, is outsourced from NDTV, The Hindu, and the India Today Group Online. Says Sriram Adukoorie, 32, Manager (Consumer Group), Microsoft India, and the man behind the Indian version of msn: ''We are working towards content aggregation. Indians would like local content and we intend to provide that. We plan to aggregate content from various sources, and give it the msn flavour.'' There's nothing unique about this model: several portals follow the same approach.

What is unique, however, is msn's approach to specialised information. The portal's channel on cricket is sourced from www.crickinfo.com. And, in return for being part of a portal that is an internationally-known brand that will (almost certainly) advertise heavily in India too, crickinfo pays msn to feature its content. In return for a consideration, of course. Explains Adukoorie: ''It (the payment) is comparable to what they would have otherwise spent promoting and advertising their site. So, some of their marketing cost comes our way.''

Thus, it is theoretically possible for a company that wishes to be a portal to just have the money power to invest in brand-building and technology: its content will be sourced from a range of vortals which may, if they believe being seen on the portal helps their cause, actually be willing to pay it to do so. Gradually, these payments could extend to revenue-sharing agreements. Net net: a content aggregation model can work if the aggregator has the ability and the resources to build a brand.

Who will emerge on the winning side in PW II? The Indian editions of international portals? The home-grown portals? Or the vern ones? The former enter the market on the strength of brandnames that are recognised globally. But 'Indian' portals aren't without their advantages either. Agrees Kumud Goel, 41, Promoter, jaldi.com: ''I do not see why Indian portals should revisit their strategies. They are rich in terms of technology and content, and understand the needs of the local customer better.'' Thus, the next few months are likely to witness a spate of alliances, mergers, and acquisitions.

For one, international portals could try to forge alliances with their Indian counterparts. Agrees N. Arjun, 43, CEO, Mantra Online: ''International portals will have a lot of catching up to do in terms of content and customer needs. For this, they may buy outright, or acquire a strategic stake in Indian portals.'' Or a clutch of Indian portals could merge to fight competition.

Are the rewards worth the effort? And the money? The numbers paint a not-so-encouraging picture. The number of Net-users in the country is expected to increase from 2.1 million in 1999 to 15 million by end-2002, according to NASSCOM. And although NASSCOM projects the value of e-Commerce transactions to reach Rs 50,000 crore by then, the bulk of this will arise from b2b commerce. Not the b2c transactions that would ideally fall into the domain of most horizontal portals. PW II could witness a shakeout, sure, but from the e-Commerce point of view, these rumblings could well be nothing more than a tempest in a thimble.

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