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Rediff.com Invests in Education

28 May, 2009

Viewing the exam preparation market as a promising market, Rediff.com which reported a net loss of $8.86 million this quarter, picked up a 26% stake in the US based educational testing services provider, Examville.com according to reports from MediaNama.com. Examville.com provides testing services for SAT and other examinations. The portal is a global educational community that allows users to connect and interact with other students and teachers from around the world.

Registered members of the site get access to classroom notes, past exam papers and review material. Students can also ask various course related questions on the site and get them answered. Another important feature of Examville is that it conducts live lectures and tutoring sessions on the site.

However, the website, which has a global presence succumbed to the pressures of the global economic slowdown as its Q4 revenues dropped by 50% to $4.49 million from $9.06 million in the same quarter last year.

Rediff’s revenues from India Online too dropped by 50% this quarter to $3.43 million from $7.18 million last year in the same quarter. According to the company, the economic slowdown’s effect on sectors like travel, jobs, matrimonial, shopping, consumer finance and real estate have affected Rediff’s online advertising revenues, leading to the reported losses.

“Our revenue numbers for the quarter were also adversely impacted by a 25% year on year average depreciation of the Indian Rupee vis-à-vis the US dollar” said Ajit Balakrishnan, Chairman and CEO, Rediff.com.

The quarter ended results include non-cash goodwill and an intangible asset impairment charge of $6.9 million. The impairment of goodwill arose out of Rediff’s acquisition of the newspaper ‘India Abroad’ in 2001. The charge, according to the company, does not impact its cash or liquidity position.

In the next 3-4 quarters, the company expects its operating expenses to increase to about $1.5 million per quarter from the current $1.0 million. The increase in operating expenses will primarily set in as Rediff’s investment requirements are expected to increase in the product development and brand building areas. The company currently has a cash equivalent position of $45.6 million.

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Rediff.com Invests in Education

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