I was alerted to this piece of news today morning about DesiMartini, an Indian social networking site getting acquired by HT Media. The acquisition figure (rumored to be 10m USD) is eyepopping to say the least but frankly, it is not entirely unbelievable. The price one pays for a product depends largely on how badly you want it, rather than a valuation of its intrinsic worth. DesiMartini is a fairly listless website, with no noteworthy traction, notwithstanding the big advertising money it must have spent for its ad campaign on national television, yet a firmly-dug in media house like HT finds merit in the acquisition. Off course they know what is best for them, but if they payed anything evenly remotely close to that figure, they MUST BE PRETTY DESPERATE..Any which way, congrats to the DM team for pulling this off.
This is possibly the second noteworthy acquisition in the Indian Web 2.0 space, the first one being Bixee’s acquisition by MIH. And it shows that there is some value that is indeed being created by Web 2.0 startups in India, however unoriginal and ‘me-too‘ it is. That value may be miniscule compared to overseas examples, or to its possible potential, but still it is not entirely insignificant. This must surely be good news for Indian Web 2.0 wannabes.
Incidentally, I had earlier pointed towards the likelihood of SNS sites getting acquired by Indian media companies in this blog post some six months back. For established media houses, social networking is something that they cannot ignore. So its basically a ‘buy, however small’ V/S ‘build from scratch’ decision for them. And thats why the acquisition route makes perfect sense for them, even for websites that are not going anywhere in their current avatar.
What do you think?
Update: As is evident in the comments (and from other discussions on the web), there seems to be a general sense of disbelief about the acquisition and the price itself…makes me doubt the 10M price…sure 10M is a WHOLE LOT of money, for something like DM….
I think I should go and start a social networking site. May be some days later someone may buy it.
🙂
Niyaz,
Believe me, you are not alone…I am sure LOTs of people will think like you…
This is the exit option and may actually make up for the lack of a proven business model for many web 2.0 applications…
I dont believe that a website like that is being sold. I have seen the website a couple of months back and believe me, I closed the browser just at the glimpse of the homepage.
Huh…!!!! I now understand why Luck is called Luck
Amit, very well written. These kinds of deals will only create more lousy entrepreneurs/companies than good ones. A worthless site getting bought by a decent media house with a worthless digital division! We have to ask questions as to why such a thing can ever happen! Bad for India and its internet space!
Let me clear some mystery here. As far as I know, 10M $ is thrown around loosely here. My sources tell me that the site was bought for less than a million dollars. Even that according to me is a high price to pay for DM.
>ad campaign on national television
satellite tv campaign on niche channels at a very low cost spots. I don’t think they must have spend more than 1 cr. for that campaign.
Why would HT give a BS figure of 10M? I think they are making fool of themselves if they are throwing a random huge number. IMO it won’t cost HT (or anyone else) more than $5K to build and run a site like DM. HT’s brand name can easily get them 250k registered users in no time.
the only reason i know desimartini is the makkadman viral. That too i first thought its an online wineshop. at a closer glance their template looked pretty much similar to facebook, as though it was a desi copy.
In the news it was mentioned that Desimartini has 2.5 lakh members..Is it true? It does not seem to be so popular – neither does its statistics show it to be so popular..
Wow, Congratulations to DesiM. If they in fact had 250K members, $10MM would make sense.
Pingback: Webyantra » MeraSnap acquired by Hewlett Packard’s Snapfish…