Bangalore-based Indiainfo.com, which had created waves during
the past few months for its lavish media blitzkrieg, was reported to be on the
verge of shutting down, with one daily even carrying a full-page report on how
the company would not see through the year.
But Madhu Kodali, the newly appointed CEO of Indiainfo,
refuted the claims. "The story has been planted by those who have left the
organization. There is no truth in them," he said. What prompted the rumors
was the exodus of some key people
from the dot-com. Its president in charge of portals, Sunil Rajshekhar, who had
led a dramatic exodus from Times Interactive to Indiainfo a few months back,
quit the company. This time again, he is supposed to have pulled along with him
the team that he had brought from Times Interactive. While Rajshekhar’s plans
are not yet known, Kodali denied that all those who had come with Rajshekhar are
leaving. "The truth is that one VP and three other junior level officers
are quitting. Yes, some others did face uncertainty after the resignation (of
Rajshekhar). However, we have clarified that they were all rumors," he
Kodali is optimistic about Indiainfo’s outlook. "I am
positive about the company’s future and its market reality," he said.
And, what was the reason of Rajshekhar leaving Indiainfo? "Some of the
areas in the content are being downsized. This is being seen across the world in
the dot-com industry. We recognized some non-performing areas, those that are
not generating enough revenue and traffic, and decided to let go of them,"
Kodali said, reiterating that there was no shift in the basic strategy of the
No second finance?
He also refuted reports that the company has not been able to
raise finance in the second round. It is not an issue at all. "While we are
in the process of discussion for a second round of funding, we are not dependent
on it. In fact, the recent cost-cutting exercise was to make sure that we do not
depend on the next round of funding," he said.
However, Kodali admitted that the initial response to the
second round of funding was not as positive as it was earlier. "After the
Nasdaq crash, the market has been very careful. However, we expect that with our
business model, there will be a positive response," he said. According him,
the company expected to raise about $10 million in the second round, a
significant chunk of which would be used for setting up B2B marketplaces.
How would Indiainfo go about the cost-cutting exercise?
"Cutting down on ad spend. We had to spend huge money to create a household
brand in Indiainfo. Now, the ad spend will be only 20% of what we have been
spending," Kodali said. The market however has taken the news of the exodus
with caution. "It should be kept in mind that Indiainfo is purely a
dot-com. It does not have the advantages of a traditional brick and
mortar," pointed out one source.