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Article by Mohan Babu

Dotcom revival: Slow but steady is the mantra

If international portals like Yahoo and Google are gung-ho about online advertising, can Indian portals be far behind? Portals like,, and have all been experiencing a renewed surge of inquiries from advertisers, says MOHAN BABU

It is nearly four years since the big dotcom meltdown, and although the prophets of doom had predicted that all online businesses would crash and burn, that hasn’t happened. Same was the case with the predictions on euphoria during the buildup to the hype, which again didn’t live up to the promise. However, during the ensuing few years since the dotcom burst, a few business models have not only solidified but have been growing by leaps and bounds. Case in point is eBay’s phenomenal success that has endured not only the tech meltdown but has also thrived and experienced steady growth in-spite of the slowdown in the American economy. Internet applications like online trading, bill payment and Internet banking have all acquired mainstream status. Behind the scenes, another interesting relic of the dotcom era, online advertising, has been showing signs of steady growth.

During the heady days of the Internet boom, websites were going overboard advertising their wares by spending millions of dollars sponsoring advertisement slots on TV during the American Superbowl, Macy’s Thanksgiving parade, etc. At that time most advertisers were clueless on the benefits of advertising on the Web and experimented with different measures including the infamous ‘page hits’ ‘eyeballs’, etc. Needless to say, that was an era when hardly anyone asked about the RoI (Return on Investment) on Internet sites or applications. Being there, being a first mover was more important than ‘mundane’ aspects of making money. The same advertisers almost stopped dead in the tracks the moment slowdown hit home.

Recounting her experiences selling online adverts after the Internet bubble burst, Wenda Harris Millard, Yahoo’s advertising chief, in a recent Fortune article (10 Tech Trends to Bet On, February 2004), was quoted saying that it was an experience she does not wish to repeat: “Major advertisers that had spent billions with Yahoo and other Internet sites when times were good almost completely stopped writing cheques. The medium didn’t work, they said. Banner ads had about the same response rate as direct mail, but cost more. And all the promises about being able to use the Internet ads to track what consumers buy and why turned out to be just that—promises.” Giving a positive twist to the current scene, the article went on to add: “Yet today, Millard says she can barely keep up with the demand. Advertising space on Yahoo’s auto and movie pages is sold out for 2004, and Yahoo’s profits, which are still largely advertising driven, have sextupled in the past year.”

Google’s foray into the business of online advertising by providing a small list of relevant advertisers with every search is legendary, a move that raked in millions of dollars for the company. Google also started ‘adsense’ sometime last year, a programme that allows individual websites, blogs and portals to display a small advertisement every time a Web page is displayed. A Google algorithm automatically serves up relevant advertising banners depending on the content of the page. Google shares a part of profits of every click with the website.

If international portals like Yahoo and Google are gung-ho about online advertising, can Indian portals be far behind? Portals catering to NRIs like,,, have all been experiencing renewed surge in interest among advertisers, though most are guarded about actual numbers. (Side note: I have been associated with as a managing partner since its inception in 1999 and am privy to the workings and business models of such niche portals.)

GaramChai’s manager of operations, Raj Narayan concedes that they are indeed receiving an increasing number of inquiries from advertisers and prospective clients who are savvier about advertising on the Web. Most clients have their internal checks and balances and are more aware of the workings of Internet marketing. On the flip side, many advertisers looking for instant gratification by launching online advertising campaigns, find that the clicks on their banner advertisement don’t always translate into instant business. For instance, a bank advertising services for NRIs may find that clicks from advertising on a niche portal may not translate to a proportionate number of customers signing up. However, the same advertiser may find an improvement in brand recognition, what advertising guru’s call subliminal brand recognition, which may be worth a lot over a long period of time.

Does all this renewed interest from online advertisers mean that a dotcom revival is on the horizon? It is hard to say. However, one thing is for certain, portals that were just limping along without any thrust or resources will find that they are able to generate much needed revenue to keep their operations buzzing. The bottomline: while grandiose ideas like selling pet food or groceries over the Web may find it hard to make it big, portals catering to niche, targeted segments will find that they can continue to build on their strengths as we emerge from a tech slump.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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