Shares of Internet service provider Rediff.com India Ltd. (Nasdaq: REDF) were up as much as 18 percent from Wednesday’s closing price in morning trading on Thursday. Shares of Rediff were up more than 3 percent in pre-market trading today, as well.
For the second quarter ended September 30, Rediff.com reported a net loss of $1.59 million, or 6 cents per ADS, down from $2.61 million, or 9 cents per ADS. Total revenue in the quarter climbed 21 percent to $5.07 million over the same quarter last year. Gross margin in the quarter increased to $2.48 million, or 49 percent of sales, up from $1.57 million, or 37 percent of sales. The company’s core online advertising revenues in its India business grew 46 percent compared to the same quarter of the previous year; total India revenues, which includes fee-based and online advertising revenues, grew 35 percent for the quarter, while Rediff’s global revenues grew 21 percent for the quarter, in each case over the same quarter last year.
As of September 30, 2010, Rediff.com’s total registered users grew to 95 million, an increase of 15 percent compared to the comparable period in 2009.
“New products and services introduced over the past year have been focused on improving our users experience, as well as expanding our footprint in new growth segments, such as social networking, gaming and now, mobile services,” said Rediff.com’s Chairman and CEO, Ajit Balakrishnan in a statement. “Our balance sheet remains strong and we believe Rediff has improved its competitive position and is poised for growth in the years ahead.”
One of Rediff.com’s most recent initiatives is a subscription-based e-mail service called Rediffmail NG. Rediffmail NG allows Indian Internet users to sync, send and receive e-mails on their mobile phones for about $1 per-month. The service works across almost all mobile phone platforms including Symbian, Java, Andriod, as well on almost all low cost phones starting at prices as low as US $30. This is a first for the Indian market as the estimated 670 million mobile phone user in India will now have affordable email service at their fingertips.
“Our Rediffmail NG mobile platform is a first step towards increasing our share of subscription-based revenue and we believe, will yield an additional revenue stream for our Company while enabling us to take part in the exciting growth of mobile services,” Balakrishnan said.