Times Internet Ltd, the digital business arm of media conglomerate Times Group, has charted out an aggressive growth strategy, targeting eight-fold rise in revenue to $1.2 billion in four years. Gautam Sinha, its CEO, hopes digital advertising, the company’s revenue mainstay, and e-commerce and subscription businesses will not only fuel future growth, but also help it achieve the lofty targets. Excerpts
Last financial year, you said you were on course to achieving $150 million in net revenue. Did that happen?
We targeted 45% growth and net revenue of $150 million, and we achieved that. This year, we are looking at 50-55% growth across properties, and we are definitely seeing some tailwinds with Jio boosting digital content. Consumption has gone through the roof across properties.
How are your revenue streams performing individually?
Our media properties, including The Times of India, The Economic Times, Cricbuzz and Gaana, together constitute about 47% of the revenue. About 24% comes from classifieds, which is MagicBricks and others, and about 17% comes from subscription. The rest comes from transactions.
Of our 37 properties, 8-9 are in the matured category (7-plus years), 5-6 are emerging and the rest early-stage.
Six months ago, you had told us you were targeting $1 billion in revenue in five years. Are you sticking to that target?
Our target is to hit $1.2 billion in net revenue by 2021. As I said earlier, we monetise through ad sales, subscription, classifieds and transactions.
Digital ad revenue is a $1.2-billion-plus market in India today. That is going to increase to more than $4 billion. And a large part of that is between premium and performance. The performance side (where advertisers pay based on measurable results) is dominated by the duopoly of Google and Facebook, and most others compete on the premium side (ad display alongside content), which is just 25-30% of the market. When we invested in the ad-tech platform Colombia four years ago, our idea was to go after performance revenue. In the last one year, we have seen significant revenues coming from the performance side as well. If advertisers want to do brand campaigns for targeted audience, we have the ability to do that.
How do you compete with Facebook and Google for performance side ad dollars?
We want to create a compelling platform for marketers and advertisers. Every player is approaching the market from their respective strengths. Pause for a moment, and look at Facebook. What kind of data do they have? They have your entire social graph, your friends, age, gender, what kind of articles you like, etc. What does Google have? It has your intent. What do we have? We have interest graphs that capture intent and behaviour.
When you submit your resume on TimesJobs, search for property on MagicBricks or look for restaurants on DineOut, you are giving very strong intent signals. If you are browsing articles on cars, you are giving us strong behaviour signals. Now Colombia is anonymising and putting all these attributes together. That is why we say we’ve a compelling product to serve our customers.
What’s your share of the digital ad revenue market?
Around 4-6%. In the digital landscape, we are targeting 12-13% of the market by 2021. Together, Facebook and Google will be 60-65%. We now monetise for 60 media properties of other publishers. Colombia is performing better than many other platforms.
We wanted to make sure that the relationship is valuable for our partners. We are bringing them revenues. We are giving traffic back to them, and they don’t have to hire a digital sales team.
Earlier, you also spoke about a fund for mergers and acquisitions (M&A). Any progress on that front?
We will continue to make investments. However, we are yet to decide on the M&A fund. It is another couple of years before we think [about it]. There is a lot to execute right now. We are not necessarily going to compete against a VC firm. Over the last three years, we have acquired 12 companies and will continue to do so from our own revenues. Structuring it as a fund is at least a couple of years away, even in terms of a decision.
We have shown aggressive intent when it comes to acquisition of digital properties.
What are your thoughts on inorganic growth?
The ticket size of our acquisitions is generally up to $20 million, but we are now looking at much larger companies. Though we will still be cautious while putting in large sums, we won’t shy away from making large bets.
In the next 1-2 years, you will see a good amount of investments by us.
We will look at ways to monetise our wide reach better. Though most of our revenue comes from ads, growth will come from transaction and subscription businesses. We will invest heavily in these, apart from video. We will look at subscription- and transaction-focussed businesses in fin-tech, ed-tech and health-tech, among others.
You re-entered e-commerce with Gadgets Now. How is it shaping up?
We wanted to enter an e-commerce area where we have some competitive advantage. Gadget is one area where content has some value. That gives us significant advantage in terms of marketing expenses. Gadget review is not necessarily a transaction-based business, but one that becomes a launch platform for new products.
Large horizontal e-commerce players have volumes, but we want to cater to new product launches. We launched Gadgets Now in the second quarter of last year, and reached Rs 150-crore GMV run rate in just eight months. I think that is pretty good. We are not running any campaigns, and it is running at neutral EBITDA (earnings before interest, tax, depreciation and amortidation), which is important.
Any other vertical you plan on entering?
We have not reached scale on fashion, but we are experimenting a bit with it. We already have properties like iDiva and MensXP. Within these platforms, we will have placements that will cater to transaction businesses.
When do you expect to turn profitable?
2018-19 is our target to break even. We have prepared a five-year plan. By 2021, we expect to be 35% EBITDA-positive.
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