India and Web 2.0

iLeher’s Madhur writes:

If you put the above pieces together in todays situation, you have at least 20 players in a market of 8 million users, who are using Internet for less than 10 hours per week vying for a few million dollars of revenues? You can extrapolate the above numbers to 2010 and still the picture wont look any prettier. I would love to hear any catches in the above analysis, but given this data I would not invest or start something that relies completely on ad for revenues from Indian markets, unless there is a killer app in mind that will acquire a really massive number of users quickly and probably get acquired by a big company. I think in India it still makes more sense to start web services with alternative sources of revenues – more like traditional ecommerce services . Not surprising that most of the VC money is going to such services. Of course there is need for sites where youth generation hangs out or where people share bookmarks or latest stories, but the market is small and it will be very interesting who emerges out as the winner. More interesting to see will be what innovations come out considering these facts about the Indian market, both in terms of type/quality of service and in terms of business models.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.