Movers and Shakers of Year 2006

Written by: Madhur

On Dec 27th, 2006

It’s that time of the year. Everyone is writing about the best of 2006. We thought it would be nice to look back at the happenings in the industry in the past year. Here is a collection of news that made the headlines in 2006.

THE News
The biggest event of the year was undoubtedly the IPO of Info-Edge (group owning Naukri, 99acres, JeevanSathi). This event has heralded a new era in the consumer Internet industry in India as it became the first Internet company ever to be listed on an Indian Stock Exchange. We hope to see some more companies to follow suit in the coming few years to keep the rally going. Some of the probable followers include the Shaadi group, BharatMatrimony group and the online travel companies.

Investments
Lot of money has poured in the market in 2006. As Venture Intelligence reports, VCs have made 53 early-stage investments in start-ups in India worth $355 million during the first nine months of 2006. That’s still nearly twice as much activity in that period than the two previous years combined. Here is a partial list of the investors and their portfolio companies.The leading sector in terms of investments has been without any doubt – Travel. Makemytrip, Yatra, TravelGuru, Cleartrip are some of the big names in this sector and all of them have already taken their second rounds of funding this year. The biggest of the VC’s from Silicon Valley including Sequoia, KPCB, Matrix, Norwest, etc. have made their presence felt in India. Some of the other companies that attracted big investments included online DVD rental company SeventyMM, leading community portal Sulekha, India specific search engine Guruji.com and online tutoring company TutorVista.

M&A
The only one that we know of is the acquisition of web2.0 companies Bixee and Pixrat by MIH networks. We hope to see more activity in this sector in order to sustain the bullish web2.0 scene and the overall ecosystem.

Web2.0
Although we raised our own concerns about the sustainability of web2.0 companies, this has been the most active sector because of obvious reasons – low barrier to entry both in terms of technology and investment. Following the trend from the West, loads of startups are trying to make a mark in social networking scene including photo sharing, video sharing, news/events sharing. Here is a partial list of companies trying to fight it out to acquire whatever small percent of users and advertising revenue that is available in the Indian market today.

Fun facts and figures

  • Airline ticket customers formed 40% of online shoppers in India, followed by books comprising with 29% and music at 24% of the total purchases. 30,000 Indians buy travel tickets online everyday.
  • The number of online shoppers in India rose 7% to 3.49 million in the first half of 2006 from 3.27 million a year earlier.
  • High-speed connections in India more than doubled to 1.92 million at the end of October from 690,000 in the year 2005.
  • Desktops account for 80 per cent of the total personal computer market as compared to 20 per cent of laptops. The latter will grow at over 100 per cent from 431,834 units sold in 2005-06 to 863,668 units in 2006-07 as compared to desktop sales growing at 22 per cent from 4,164,724 units in 2005-06 to 5,676,111 units in 2006-07.
  • The number of total Internet users in India stands at 35 million currently; out of this 10 million are considered to be “power users”.

Next?
Overall, 2006 was an active year full of excitement in the industry among investors, entrepreneurs and of course the users of the Internet themselves. The year has kicked in the enthusiasm required for bootstrapping the so called “Silicon Valley in India“. 2007 is going to be very important to take these early developments to the next level towards realizing the Silicon Valley dream. At the risk of sounding obvious, increase in Internet penetration (esp. broadband) is on the top of my wish list for 2007. Without the Internet users equipped with good connection speed, industry cannot go much further. Other than that I think eCommerce really needs a boost because that is the main driver of the Internet economy. More eCommerce, more advertising dollars, more business models and more companies.

Where do you think the industry is heading from here? What’s in your wish list?

Sphere: Related Content

Entry Filed under: DVD rental,guruji,guruji.com,news,online rental,search,seventymm,web2.0

8 Responses

  1. 1. IndianPad said on December 28th, 2006 at 3:46 am

    Movers and Shakers of Year 2006…

    Movers and Shakers of Year 2006 posted at IndianPad.com…

  2. 2. vivek garg said on December 28th, 2006 at 4:20 am

    my wish list for 2007 ..

    1. better usability and customer service
    2. better interface to the sites
    3. end to end value in services being offered
    4. ofcourse, innovations in business processes
    5. new software based products catering to indian market…..

    ….

    n. eradication of poverty, illiteracy, funding for new schools … ah i can go on.

  3. 3. DesiPundit » Archives » Movers And Shakers Of Year 2006 said on December 29th, 2006 at 4:26 pm

    […] iLeher has a nice retrospective on the biggest news stories of the Indian Internet industry. […]

  4. 4. DesiPundit » Archives » Organized Retail Boom-Myth Or Reality? said on December 29th, 2006 at 4:32 pm

    […] Mayank Krishna does some crystal gazing and ponders over the future of Indian retail. I agree with one of his conclusions-mom ‘n’ pop stores aren’t going anywhere, at least in the foreseeable future. […]

  5. 5. Raj said on December 29th, 2006 at 6:08 pm

    How about blogs by Indians? I think this should be in the list as well.

  6. 6. Madhur said on December 29th, 2006 at 6:32 pm

    Sure Raj, do you know of any numbers about blogs by Indians that you want to share here?

  7. 7. Nitin said on December 30th, 2006 at 2:35 am

    I had almost forgotten about many of the developments. thanks,

    What next? I hope by next year end we see some corporate organisations integrate their operations with Web 2.0 or become Enterprise 2.0

  8. 8. Hrishikesh said on August 23rd, 2008 at 4:07 am

    Regarding laptop and desktops, I feel 2008 and 2009 will notice netbook revolution. Laptops like ASUS Eee PC (which start at just Rs. 16,000) make it affordable for everyone. And these have just started rolling out in India so the market is huge and we’ll see more of these in over the next 12-18 months!

    More info on ASUS’ Eee PC can be found at website – eeepc.in

    Lenovo, MSI, HCL also have similar offerings but ASUS’ model is the most popular right now.

    I think you guys should do a followup to this great article. Thanks!

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