Earlier this month, Times Internet Ltd, the digital media company of Bennett, Coleman and Co. Ltd, was selected by the department of telecommunications (DoT) to conduct the 2G spectrum auction online. Although tight-lipped about the e-auction details, Satyan Gajwani, the company’s newly appointed chief executive officer (CEO) married to BCCL vice-chairman Samir Jain’s daughter, shared his plan to make Times Internet nimble and profitable. Edited excerpts: How are you preparing for the 2G spectrum auction? Satyan Gajwani, CEO, Times Internet Ltd. Photo: Ramesh Pathania/Mint Satyan Gajwani, CEO, Times Internet Ltd. Photo: Ramesh Pathania/Mint I can’t talk to you about this very much. The technology is already done. We have an e-auctioning platform, which handles simultaneous multi-bidding. There is some customization required for DoT. Right now, what we are doing is security testing. We are just making sure it is super secure, stable and reliable. The system would be so rigorous that no one on our side will know anything about the bids. They will be encrypted. Was the e-auction platform built in anticipation of the 2G auction? It was built earlier. We believe that e-auctioning and e-bidding for tenders or things in general will be big globally. If this is rigorous and strong enough for a 2G auction, then there is no reason why the same platform shouldn’t be strong enough for e-bidding in the US or in Europe. Although Times group launched the online business in 1999, it has been overtaken by younger and smarter companies, especially in e-commerce. What went wrong? The interesting thing is we have participated in everything on the Internet—travel, shopping, news, video, email. Obviously, we have had varying levels of success. You are absolutely right that there have been competitors in each of these businesses and in certain ones they passed us. The question I asked when I joined, why that happened? Is it something structural or strategic? It is a little bit of both. The two major changes that I am trying to make are, one, to structure it like a start-up. So, instead of being one big company, we are turning ourselves into 15 little companies. Each business head is like a CEO and I am more chairman than a CEO. The second thing we are doing is putting emphasis on product and technology. The best analogy I can give is that there is this new CEO at Yahoo—Marissa Mayer. The reason why people are so excited about her is that she is a products person. If a product is really strong, advertising follows. Text, audio, video, photos, is content. How I interact with that content is (a) product. Traditionally, we have been a media company where content and advertising comes first. We were a content company that used technology. Now we are a technology company that uses content. But you have everything—shopping, news and entertainment—all under one roof. Aren’t you confusing the consumer? Today, we run about 15 verticals, The Times of India, The Economic Times, Indiatimes shopping and others. We are trying to run them like independent companies. Actually, legally we have changed our structure. Now Indiatimes Shopping is a separate company. Gaana.com (music website) and news are also separate. In the next few months, we will rebrand shopping. In e-commerce, we are not as big in revenues as Flipkart, but two things make us different and, in my mind, a little better. We are very capital-efficient. Say, if another company has invested Rs. 100-150 crore and has a revenue of Rs. 300-400 crore, our investment has been Rs. 30-40 crore and this year we will do like Rs. 300 crore. We are building a two-tier structure. We are launching a website called SatvikShop.com, an Ayurveda products vertical selling food and personal care items. The same products are going to be available on Indiatimes Shopping. For us, these are just different front ends as we have invested time and effort in the back-end. Are you looking for investors in these businesses? Indiatimes traditionally has been very protective about investments. The way we look at the world now is these businesses need a lot of money and we must give money even if it means giving them an investor, a partner. So we may not raise money in the news portal as it is our core property, but I want Gaana.com to be a Rs. 1,000 crore business. You mentioned that Internet companies need to be nimble. In the digital space, you are competing with start-ups and not big companies. Big companies are burdened by heavy bureaucracy, big approval structures and giant hierarchies. Internet companies cannot run that way. You have to be able to run them quickly, efficiently, nimbly and that can happen with separate ownership. For instance, we will be giving Esops (employee stock options). The shopping management team will own a piece of shopping, which again is very different from the way Times group operates. Times is very strict about equity. But we believe people are going to build this business. Isn’t it too late to change? E-commerce is a great space, but what excites me is the next wave of Internet companies in digital entertainment. Gaana.com is already the largest music service in India. I know we have been talking of BoxTV, the video site comprising films and television shows, for a while now. The product is done, but content deals are taking time. We should build something so good that people would pay for it ultimately. Fortunately, there are global comparables that prove it works. When will your Rs. 261.6 crore deal for Internet, mobile and radio rights for the Indian Premier League (IPL) make money? IPL was a big deal for us. It brought to the centre that we are a serious digital video company. YouTube, which is our partner now, was also competing. IPL is a lot of money definitely. The first year we lost money, but we weren’t thinking about sales. The challenge was to get the site working in nine days. But advertisers are loving it. We have two more years to go and we will make up for the losses.

Network18 Group, which holds a 60% stake in Bigtree Entertainment Pvt. Ltd, has sold a minority stake in the company that runs online ticketing service Bookmyshow.com, to venture capital (VC) investor Accel Partners for around $12 million (Rs.66 crore), said two people close to the development.
Accel Partners has also taken a stake in Bigtree through primary issuance of shares, said one of the two persons, who spoke on condition of anonymity.
“The overall investment ticket is larger (than $12 million) as Accel Partners has also invested in the company,” said the person. Network18 will continue to be a majority investor in Bigtree, said the person, who declined to divulge the total amount Accel is putting into the company.
Bigtree had mandated Mumbai-based investment bank Avendus Capital Pvt. Ltd for this deal.
Sai Kumar, group chief executive of Network18 Media and Investments Ltd, declined to comment. An email sent to Prashanth Prakash, partner of Accel Partners, on Tuesday did not elicit any response. Accel Partners’ partner Subrata Mitra also did not respond to text messages.
Bigtree Entertainment’s founder and chief executive Ashish Hemrajani, too, did not respond to a mail sent by Mint. Calls made to him also remained unanswered.
In 2007, the Raghav Bahl-promoted Network18 bought a strategic stake in Bigtree Entertainment. The company was founded in 1999. Its ticketing service, Bookmyshow.com, was launched in 2007 and allows users to buy tickets for movies, concerts, sports events and plays across India.
Revenue generated from Bookmyshow.com is accounted under Web18, the Internet and mobile arm of Network18. For the financial year ended March 2012, Web18’s revenues grew 18.6% to Rs.100.7 crore from Rs..84.9 crore in the year earlier. However, for the fourth quarter ended 31 March, revenue was at Rs.25.9 crore, almost flat compared to a year ago.
Over $500 million was invested in 67 e-commerce deals last year, according to estimates by VCCEdge, which tracks investment activity. The Internet and Mobile Association of India pegs the number of Internet users in India at more than 100 million, and forecasts the number to triple by 2014-15.
But the going will not be easy any longer for e-commerce companies. “Investors are becoming very selective about investing in these firms. Unless there is something that sets apart a company from others, fund raising will not be easy,” said Siddharth Bafna, partner and head of the corporate finance and transaction services practice at Lodha and Co.