GalaTime

MediaNama: Rediff CEO Ajit Balakrishnan On 3G Licensing, VCs In India, Indic Languages, Broadband, E-Commerce

“At around 50 million users you’ll come across the language barriers. What do we need to do? We need some policy initiatives, we need linguisting tools, voice to text needs to be funded by someone. These things take money. A grant of 4-5 crores (from the government).The present view is - let Google do it, Yahoo do it, Rediff do it, but it’s the wrong approach. Tech and tools need to be freely available. If one or two people do it, it doesnt become an industry. The Ministry of IT has an Annual Budget of Rs. 1000 crores.”

The increasing popularity of Quillpad, Lipikaar, Google Transliterator, etc. should help.

“With mobile commerce, the challenge is margins. If the operator keeps 50%, no point. We need a payment system where the margin is no more than 1-3%.”

Not likely to happen until the big operators stop growing (in terms of subscriber / ARPU) at a double-digit pace and start looking for other revenue streams.

“When the IAMAI had initially approach the government for assistance related to broadband, they found they had shot themselves in the foot. Balakrishnan explained: “A part of the reason why the Government support did not happen is that the IAMAI focused on stating bigger and bigger user numbers. They quoted 50 million, when the base was 10. Most of members of IAMAI committee were youngsters looking to raise capital, so larger numbers helped them. When we went to the government, they said - what’s the problem? (i.e. you have a large base anyway).”

Ah yes, the need to show a large and fast growing market (the J curve / hockey stick) while pitching to VCs. Been there, done that. :)

“What we miss are the Angel investors, who will come and give you 10-20 lakhs. I know there are some who do that, but you need some 5,000-10,000 from them. What’s missing is a provision in Indian Income Tax act, which allows you to write off angel investments.”

Amen! Couldn’t have said it better.

Early-stage (seed) funding is where the biggest gap - and opportunity - is. At Venture Center, we are doing something about this. But unless the GoI pushes reforms in this space (eg. favorable tax treatment for angels/VCs setup as LLPs), the 10L-1crore funding scene will remain stagnant.

• Economic Times: Bulls knock out bears in Akruti thriller

According to market talk, some players who short-sold Akruti March futures have been trapped by the upswing in prices. They have been frantically trying to cover up their positions over the past few sessions, sending prices of the stock and its futures higher.

Akruti’s share price has more than doubled since the beginning of futures and options contracts’ March series, with brokers attributing the spectacular rise to the battle between the two camps.

Akruti stock is down 26%+ today.

• McKinsey Quarterly: Building an innovation nation

• NY Times: House Passes Heavy Tax on Bonuses at Rescued Firms

The House overwhelmingly approved on Thursday a near total tax on bonuses paid this year to employees of the American International Group and other firms that have accepted large amounts of federal bailout funds, rattling Wall Street as lawmakers rushed to respond to populist anger.

Despite questions about the legality of the retroactive 90 percent levy, Democrats and some Republicans said the tax on bonuses for traders, executives and bankers earning more than $250,000 was the quickest way to show angry Americans that Congress intended to recoup the extra dollars. Even backers of the measure noted it was an extraordinary step.