The Hidden Dynamics of Print-Online Competition in Classified Advertising Markets

By matching supply and demand in the corresponding markets for goods and services, publishers of classified advertisements serve as information brokers increasing transparency and driving market clearance.

These days specific online services for each category of classified advertisements promise a far more efficient matching mechanism at a lower price and compete with the incumbent print players. With reference from different sources such as IAMAI report and other research company an empirical analysis of classified advertisements in the categories of recruitment, real estate and automotive, based on data from India result to tremendous growth in internet classified business.

The substitution dynamics hidden by fluctuating overall market developments are derived from a simultaneous fit of the market dependence of advertising space in newspapers and a time-dependent substitution term. The results show that approximately half of the classified print advertisements have already migrated to online players. However, this substitution seems to have reached at least a temporary saturation.

Apparently, the so-called Riepl's 'law', formulated at the beginning of the twentieth century, still holds true today. This 'law' states that once a specific technical medium has established itself in social practices it will exhibit a strong resistance to change. Job Portals such as Naukri.com and monster.com does not seem to have threat from print media as presumed earlier. Timesjobs.com having a strong backup of print media could not shake the online market. Online players have their own kingdom to rule, shaadi.com, bharatmatrimony.com, jeevansaathi.com and timesmatri.com(simplymarry.com) have their own story. Shaadi and Bharatmatrimony fighting hard to win the market but again here the print media don't make much of difference to uplift simplymarry.com in online matrimonial classified business.

Realestate portal just started in India and picked up the market soon has players such as 99acres.com, realacres.com, indiaproperty.com and magicbricks.com. magicbricks.com has supporting print classifieds sections Times of India respectively but again the online market did not move down due to the print media presence.

VC's looking for new internet trends in indian dotcom

"Venture capitalists have become much more cautious in the last six to seven months in the wake of a high rate of failure in the dotcom business both in India and abroad," Amul Gogna, executive director of the Investment Information and Credit Rating Agency (ICRA), told India Abroad News Service.
In the changed scenario, VCs are now looking at new areas such travel, jobs, matrimony and real estate portals he added. The emergence of venture capital funding in the country has helped in the evolution of Internet-based ventures.

Risk capital investment in the domestic information technology (IT) sector increased from $20 million in 1996 to $320 million in 2006 and most of the venture funding has been in the areas of Web site and portal creation.Analysts say dotcom companies, mainly in the business-to-consumer (B2C) segment, which were cash-starved, were spending more money than required or had no revenue model, have started wilting under pressure.

"Most of the venture capitalists in India were looking at valuation game and nobody took a close look at the revenue model of the dotcom companies. Indian Dotcom Company has shot up with real estate portals after the bust of online travel portals such as yatra.com, cleartrip.com and makemytrip.com. Although investments will continue to flow in for the right companies, real estate portals have new dimensions in this hot market of real estate.Top 4 real estate portals to name are 99acres.com, magicbricks.com, realacres.com and indiaproperty.com. The real estate band wagon has just begun and internet players such as naukri and times group has taken internet classified business seriously.
Company Background for the above mentioned real estate portals are as follows.

1) 99acres.com - Info Edge (India) Ltd. (Naukri Group)
2) MagicBricks.com - Times group
3) RealAcres.com - Horizon InfoVentures(p) Ltd
4) IndiaProperty.com - Bharatmatrimony group

Although online real estate portals was half a decade back but that did not survived. The trend of Internet business is changing and the mass is digging the information from the cloud of Internet.According to ICRA's India Internet Business Report, there are around 50,000 dotcoms that are of Indian origin or are India oriented.

In view of the high initial promotional expenditure, which is Rs. 100 million to 150 million on an average, it is assumed that the average turnover of a dotcom venture would be in the range of Rs. 100 million-120 million, says the report. When this figure is reconciled with Rs. 253 billion, which is the expected aggregate, worth of e-commerce activities in India in 2007, the inevitable conclusion is that only five to 10 percent of the existing Internet ventures would eventually survive, it added.