Yahoo! India is completing four years of existence in the subcontinent and is raring to go. What with competition heating up among the big portals with the 1 GB (gigabyte) mail account that Google's Gmail and Rediff.com have offered, Yahoo! has gone ahead and offered free 100 MB space to its email subscribers... which was quite a jump from the 6 MB space that the service provider initially offered.

As of now the 100 MB is being offered to all Yahoo! subscribers except in the Indian, Chinese and Taiwan markets. In a t?te-?-t?te with indiantelevision.com's Hetal Adesara, Yahoo! India country head Neville Taraporewalla spoke about Yahoo!'s plans for India, the Indian online market viz-a-viz the international one and more.

Excerpts:

Online advertising has been growing steadily over the last two years and a lot of brands and sectors which were not advertising online earlier have increasingly started using the net to promote their products. What do you attribute this to?
I think it is just the fact that the medium has matured. There is a certain acceptance among marketers that this medium is here to stay. It has a pretty large penetration in the market and obviously if appropriately and correctly used it can achieve a lot of goals which marketers have in mind.

Also, it is the only medium which allows you to demographically target consumers in multiple ways. And there is the growth of the Internet itself as the number of users is increasing. Today there are 25 million users in India and they happen to be in the A1 and A2 categories which are those people who actually have the money spending power.

The next six months will play a very critical role in all media planning that takes place and Internet will be one of the media that media planners will have to consider.

So do you think that marketers have started believing more in the power of the Internet?
Yes, I do think so. Actually the bend towards the Internet started from the client's end. If you see Yahoo!'s clientele, we have a lot of dealings directly with the clients. I think the agencies have been a little slow in accepting the medium. Probably they were busy with television and print so obviously no resources were moved onto the Internet.

We at Yahoo! India have introduced a lot more scientific ways of marketing our products in the last one year than in the past.

How much would you peg the online advertising market in India as?
This year it is about $15 million compared to last year when it was $8.5 million. This is practically a 100 per cent jump. And I believe that in the next three years, there will be a 50 - 70 per cent increase every year.

Where do you think the Indian online advertising market stands as compared to the international market?
It is negligible, because if you look at the total advertising pie in India, online advertising is 0.5 per cent currently but growing every quarter. I believe that the share of online advertising will grow to be around 2.5 to 5 per cent to the total advertising pie within the next two years. It is growing. I would like to see the figure go to Rs 1 billion this year. This year they say that it is going to be anywhere between Rs 700 million to Rs 1 billion. But if it touches Rs 1 billion, it is going to be great as it will be over a 100 per cent jump over last year. It is going to be fantastic. All indicators are that we can do it.

Which are the brands that advertise on your portal?
All the traditional brands advertise with us. In the financial sector we have ICICI Bank, Citi Bank, ICICI Direct and HDFC Bank. In the FMCG sector we have Pepsi, Motorola and Samsung. Channels that have advertised with us are ESPN and Discovery. Among the Dot Coms we have Shaadi.com, Baazee.com and Bharatmatrimony.com. In the travel business we have Thomas Cook and the Department of Tourism. So I would say that we have the top five brands across the board.

And the most important thing is that in the last two quarters, I have seen Hindustan Levers Limited (HLL) moving their budgets to the Internet and they being India's largest advertising company. And when they shift their budgets to the Internet, it spells a lot.

One of the things that we have pioneered is the use of innovative advertising on the Internet. Then we found a lot of others replicating it. If you see what Sify or Rediff did for Close Up re-launch campaign, we were very different from them. For that of course we leverage our international experience.

Even during the last year's World Cup, the launch of the Pepsi Blue won the Gold Abby award. We present our client's brand in an innovative way because at the end of the day, the Internet is a classic place where you can actually gain mindshare more than the market share.

It is also how we communicate all this to our clients and excite them which in turn will make them buy into this idea. Then we also have to show them that the ideas are deliverable and if they won't convert into some form of traffic, eyeballs or mindshare then obviously the client is not going to look at it.

If we go back to what Yahoo! India did with the Close-Up re-launch recently, the whole homepage was branded red with it. Don't you agree with the fact that the mother brand is sacrosanct?
I'd say you are very traditional. I'll give you an example of when indya.com was re-launched; they did a wrap around with Times of India. Also this Close Up stuff could have been even better if it was user initiated. Like we could have done the innovation on the Yahoo! India page and then when a user visits it, he would have a choice of whether to turn it red or not. So in such a case one can still keep the homepage sacrosanct.

What had happened on the first day of the Close Up ad on Yahoo! India, that the whole page was red when you go to the homepage. When it came in subsequently, it was the other way round. And secondly, we frequency gapped it. So if a particular user comes to the homepage on a day, and logged on again, it would not be there. The idea was to restrict the number of times the user would see it. We have the technology to do it, so we utilised it.

What benefits does the Internet offer as compared to other media?
I think it brings about one-to-one direct communication and it allows the brand to play a much larger role in the mind of the users. It provides a platform for the brand to actually communicate with the users and let the user feel the brand.

If one logs on to pepsizone.yahoo.co.in, one will almost feel that they have landed in Pepsi land. The print or any other medium of communication will not be able to do since they are passive, while the Internet is an interactive medium. Recently, we have added multimedia to the Pepsi zone on Yahoo!, wherein one can see a commercial as many times that he wants.

So I think interactivity and one-to-one communication is what the Internet offers. It also allows the marketer to get the product that much more closer and straight into the homes of the consumer via the Internet.

How does one monitor advertising done on the Internet? That is a constant worry marketers have had, which is why they have been reluctant to put in real money on the Internet. Is there anything being done, or any neutral system being put into place for tracking the actual effectiveness and reach of Internet advertising?
Internationally there is a system and as far as Yahoo! is concerned we have an online monitoring system. Once someone becomes an advertiser with us, within 48 hours of the campaign going online, we give them all online statistics for their ad campaign.

For example: How many times was the innovation seen, the number of people who clicked on it. So the click rates actually tell us how good the communication has been.

But at the end of the day, whether the consumer buys the product advertised or not solely depends on how good the product is and the Internet companies are not responsible for that. Our job is to bring the customer to the brand. I think every subsequent medium after print has been able to do a lot more. Print allows the user to see it, television, though passive in nature, allows the user some movement and Internet allows the user to actually communicate.

We are still a media company and are no different from the print or the television media. In both these cases the idea is to evoke a response. So here also we are hoping to evoke a response but the interactivity in the case of the Internet can go a long way.

What has the response been to online mobile initiatives in India? Where do you see it going?
It is very nascent in India. We have done three or four synergistic campaigns with Kinetic and also with BBC World when they had launched their University Challenge programme. Recently, we did one with Pepsi when the movie Main Hoon Na was launched. Yahoo! has a mobile short code of 8243 where one can download a whole lot of mobile content. Pepsi carried a television campaign around the movie where Shahrukh Khan needed advice on how to win over his Chemistry teacher. So people could offer their advice as to how Khan could romance his teacher by SMSing to 8243.

Hence, there is a synergy between the web and the mobile subscribers and Yahoo! has products which we extend to the mobile. And not just commodity products like ringtones, picture messages and wall papers but core products like the mobile messenger. Users can access mail on the mobile and be in touch with everyone on Yahoo! Messenger on the mobile. We also have a new service PC to SMS, which allows communication from a computer to SMS and vice versa. All this is there and we are further looking at developing our Yahoo! core services from time to time.

What goes behind marketing a Dot Com in the industry?
Big question. I think we have been lucky because we are an international brand. Yahoo! India has been the number one website as far as Internet advertising and the major traffic sites in four metros - Kolkata, Chennai, Mumbai and Delhi are concerned. It only reflects that our brand is very strong. So obviously marketing is an important fact and more so for those which are not the leading brands. There is a lot of effort. One also needs to look at trade, offline, outdoor.

In Yahoo!, we first look at our audience online because we have an online community so we try to market our products online. Then the next step is to look offline.

What is the business model of a Dot Com in India? How different is it from the international business model?
The Indian Dot Com model is very different from the international one. I think Dot Coms have now realised (like in the case of Yahoo!) that Internet can be a very powerful medium and a very positive business model if the medium is used to offer effective services. That is what everyone in this industry is trying to leverage. Yahoo! right now looks at advertising as an important factor; in fact advertising will always be an important factor because where there are users there will be advertisers.

We also provide mobile downloadable content services to the users. So the business model of a Dot Com differs from website to website, but largely I have noticed that providing effective service over the Internet is an important thing. And if you can do that you can charge the customer.

Yahoo Europe recently acquired the price-comparison Web site Kelkoo. What is Yahoo's business plan in India?
I'll make our stand pretty clear, we have been in India since the last four years and we've always looked at opportunities as to how we can grow the market and get into new business. So obviously, commerce is an area which we are looking at.

I feel that the threshold for the total number of users needs to be 100 million for any business model to succeed. The fact that we are in this market shows that this market is potentially big for us. Our growth in terms of users and in terms of how marketers view Yahoo! in India is very positive. So we will obviously evaluate opportunities related to commerce as we go ahead.

But the biggest factor still remains that there has to be a threshold level of users. Buying over the Internet in India as of now is on the basis of cash on delivery. We would like to indulge in a truly online model. There are a lot of governmental regulations which also needs to be cleared before anything is done. So yes, we are looking at such things but at the right time and the right opportunity.

Apart from Yahoo! India's alliance with Naukri.com for Yahoo! India Careers, what are the other alliances you'll are looking at?
We have two such alliances. Last year we did a tie up with Shaadi.com to power Yahoo! Matrimony and this year we did one with Naukri.com to power Yahoo! India Careers. We will continue to work with leading verticals as we go along because at the end of the day, it is very important to offer core services to our users. So we will work with others but only the best in the business. We won't work with anyone and everyone.

What are the sources that Yahoo! aggregates its content from?
Worldwide we have an aggregation model and we do so from different websites. In India we aggregate through Reuters, India Abroad News Service, Business Standard, Mid-Day, IndiaFm, API, Equity Master etc. We are also in talks with other large content companies for tie-ups.

Why did Yahoo! offer 100 MB mail account right after Google announced the free 1 GB Gmail account? Was it a panic response?
Every journalist has an immediate link of our move to that of Google. But I don't think it is like that. We have been around since 1997 and one of our core properties has been mail. We have acquired customers over this platform and have invested in this platform. So obviously over a period of time we need to make our product better and one of our agendas has been to make it consumer centric. We will have services which will put us apart from any competitors. We welcome competition and have never said no to competition. We have Hotmail etc as our chief competitors but if one differentiates the services, I believe that Yahoo! mail is today one of the best services in terms of offering mail across the board.

I say that not just because of the 100 MB, because storage has now become a non issue. Over a period of time it is going to be the number of services that I can offer. How do I protect a user from getting spam? How do I allow a user facilities where he can search previous mails faster? How do I empower a user to create disposable email ids?

We are going to work on improving our services and make it more consumers centric. And these will separate the big boys from the other mail services. So these 1 GB, 2 GB, 3 GB is soon going to become a non issue.

Yahoo! India is increasing mail storage capacity and a host of other new services from September. Why wasn't this done in India along with the rest of the world?
It was not done in three countries - India, China and Taiwan, largely because the number of consumers in these three markets is very high and we need to upgrade our infrastructure appropriately.

All other markets operate out of the US and are centrally controlled from there so it was easy to carry this out in those places. These three markets have their own infrastructure and in India we have our infrastructure with VSNL. So we buy only certain types of hardware which are important and it takes at least 45 days to put them in place and hook them up etc. So once that gets completed we will roll it out. It will take about 45 - 60 days, so around September it should be in place.

How are the portals managing the huge size of the email IDs? Is it a way of getting subscribers hooked on to the service initially and then wake up to a shock of having to pay for the same service some months down the line? And suppose one portal does that, others will obviously follow suit. Comment.
I think it is going to differ from portal to portal because it is directly related to the business opportunity that each portal scopes for itself.

But one thing is there, that if one portal does such a thing, the others will follow suit. Isn't that the general trend in this competitive market?
I think it depends completely on where that portal is going to make money from. I personally don't think mails will become a paid service because there is not going to be a penchant to do that.

How was last year for Yahoo! India in terms of revenue? What are the expectations this year?
I won't be able to give you absolute numbers but I can tell you that we grew in terms of overall revenue by over 100 per cent.

What is going to be Yahoo! India's core focus this year?
Yahoo! India will continue to build the communication properties which includes mail, messenger, mobile, games, movies, entertainment, also online advertising because we believe we play a big role in that. Apart from that, towards the end we will look at commerce.

How similar or different are the Indian and the Chinese online markets?
I think mobile penetration is the common factor between the two as it is growing in both the markets. I think it is just the penetration that is different because more people can afford to buy a lot more things there than here. Mobile is the complete proof. The penetration of mobile in China would be somewhere around 200 million subscribers as compared to India's 37 million subscribers. So therein lies the difference. Also the penetration of Internet is very high in China when compared to India.

Yes, the opportunity in both the markets is huge but the infrastructure vis-?-vis China and India - they are poles apart. Unfortunately we lack infrastructure.

While everyone believes that the future is the Internet, it is still a long haul to where people start putting their money where their mouth is as it were. Do you think there will be a trigger that will change this and if so what is it?
I think the fact that eBay has bought Baazee.com is a good enough sign that the market is here to stay and it is here for the long haul. So I think it is a good time to be in this business.

But it is wireless telephony that is getting everyone excited at the moment...
Of course mobile and wireless telephony is growing, but so is the Internet. But there is nothing wrong if two things grow simultaneously. I don't see why they both can't grow together and moreover they are interdependent on each other to an extent.