InfoEdge (India) Ltd. is an Internet holding company in India that derives the bulk of its revenues from a jobs website called Naukri.com, and went public in November 2006 in Mumbai. I spoke to Sanjeev Bikhchandani, founder and CEO of InfoEdge, a few weeks ago in New Delhi, and was impressed yet again by how persistence and market focus allowed the company to survive the Internet bust of 2000-2001 and, later, ferocious competition from Monster.com to become a public company with a market cap in excess of $400M.
I'm writing a detailed analysis of the factors responsible for Naukri and InfoEdge's success for Startup Review; here is a sneak preview:
- Persistence: Naukri faced a very challenging business climate in 2000-2001, after the Internet bubble crashed in India, even worse than in the US. There were few users online, funding was drying up, and competitors like JobsAhead.com were capitulating and selling out cheaply (to Monster.com for $9.6M). Yet Naukri chose to forge ahead and keep building a business through the bust - a contrarian move, to say the least.
- Direct Sales Force: While its competition was retrenching and trying to conserve capital, Naukri made bold moves by expanding its direct sales force and locking up precious employer relationships with high-growth IT services companies that were sure to begin hiring again soon. These relationships were instrumental in driving big corporate accounts, both domestic, e.g., Infosys, and multi-national, e.g., IBM.
- Expanding Around a Core: InfoEdge has expanded into businesses such as Quadrangle (offline executive search), Jeevansathi (online matrimonial listings) and 99acres (online real estate listings). In its expansion strategy, the company has stayed true to its core competencies around job search or online classifieds, and resisted the temptation to stray into fancy e-commerce of Web 2.0 models that don't use its strengths or are not in the sweet spot of the Indian Internet market. Listing fees are on their way out in mature markets such as the US, for instance, but in India, classifieds providers make most of their money from listing fees; most classifieds ads are sourced offline (telephone, even fax) and usually generate a lead to a mobile phone. Clearly a CPC model is premature in this market!
More to come, stay tuned ...