One of the few Indian companies that survived the dotcom dustup was Rediff.com, founded by advertising magnate Ajit Balakrishnan in 1996. He was the subject of a long feature in MW’s first issue as an Indian Internet pioneer. Rediff.com was not only the country’s earliest source of online news for millions of Indians in the early part of the millenium , but was also a homegrown e-mail giant that also sold books, clothes and mobiles online much before Flipkart was even a gleam in the eyes of the Bansals. Why it lost its way after some years is a story that is still to be told.
Excerpted from MW Feb 2000
Ajit Balakrishnan had seized the day in the justburgeoning New World of the Internet with his trail-blazing company Rediff On The Net. Interestingly, the net company carries two unmistakable stamps of its parentage, both of which happen to be from the soon-tobe-dead advertising industry. The first is its name, coined out of the advertising giant, Rediffusion, and the second is its creator, Balakrishnan, who is also one of the original founders of the ad agency.
You’d think a man who has been one of the brains behind creating an advertising agency that not only made advertising history in India but also rewrote the rules of advertising would be happy to rest on his directorship. The company will be billing around Rs 500 crore at the end of 1999, having grown by an impressive 30% in an industry that is supposed to be in recession. Not Ajit Balakrishnan. A compulsive, chronic risk-taker, hopelessly hooked to a high-octane game where you hunt for ideas that only you can see as brilliant business opportunities, but which, to most others, often seem like the delusions of a lunatic. And having found them, you convert them into hugely successful business ventures. Which everyone then looks at and says, “Hey, how come I didn’t see that one coming?”
Somewhere, in all this, the thought crosses your mind that this may be a bit like gambling. Suggest this to Balakrishnan and the reaction is swift, severe and sharp. “I cannot even by a remote stretch of imagination think of myself as a gambler. Gambling is when you toss a coin with the full knowledge that you don’t know what the outcome will be. In risk-taking, you think you know the outcome, you’ve worked a lot towards it. Sometimes it might not happen the way you want it to but that’s not for lack of trying. A gambler takes pleasure in not knowing the outcome,” he says.
It was crystal clear to Balakrishnan in 1989 that he must shut down PSI’s Rs 15 crore state-of-the-art computer manufacturing factory that he had just set up in a record time of 10 months. Why, you wonder. Because the government was moving towards decontrolling the computer hardware industry and in the new environment, he could see, again with great clarity, that there was no way an Indian hardware manufacturer could compete on costs with multinationals who were expected back in. Of course PSI survived the closure and lived to tell the tale. And though Balakrishnan sold out controlling interest in the company to his French partner Bull, he with great prescience, retained a 11 per cent holding in the company and helped transform it into a software developer. With the share price topping the Rs 1,500 mark in the last few weeks, PSI shareholders are joyously singing their way to the bank, including Balakrishnan, whose holding should be now be worth close to Rs 90 crore. Another good reason for him to retire.
Rediff is today India’s most successful internet site, offering the most comprehensive range of products—from free e-mail to a search engine, from personal investment services to e-commerce, news, advice and much more. It is believed to get close to 30 million hits a month. Its investors include the likes of Intel, Draper and Warbug Pincus. There has been talk about an IPO sometime this year. The big question is about where it would be listed—on the Nasdaq or/ and the Indian stock exchanges. Estimates about the value of the company have ranged between $100–200 million. It is a difficult guessing game considering the vaulting valuations of internet companies worldwide. Closer home Satyam paid Rs 550 crore to take over the much smaller Indiaworld.com recently. Whatever happens, there is no doubt that Balakrishnan will be rewarded handsomely.
