"A sequential growth in overall revenues for the quarter ended June 30, 2009 of 11% in US Dollar terms (7% in Indian Rupee terms) makes us cautiously optimistic but it is important to note that on a year-on-year basis revenues are lower than in the corresponding quarter in the previous year by 40% in US Dollar terms (31% in Indian Rupee terms). India revenues were up 15% quarter over quarter (40% lower on a year-on-year basis) in US Dollar terms. The economic environment for online advertising in India continues to be challenging. Indian advertisers in the credit card, home loan, online travel, jobs, matrimony, shopping and real estate segments who normally account for about half of all online advertising in India continue to face difficult business conditions" said Ajit Balakrishnan, Chairman and CEO, Rediff.com."We have recently completed a number of initiatives to strengthen our business and enhance our user base. We have enforced a common data model and adopted a RESTful architecture across all our services. Key benefits of this are improved performance and scalability and ease of adding newer features to existing products to keep pace with this fast evolving industry. Our services are now accessible with equal ease over both PC and Mobile Phone. We have improved our Search technology and have introduced social and collective intelligence features across all our services.
These and other initiatives will likely require us to increase our investments in product development and brand building over the next two to three quarters. We thus expect an increase in our operating expenses from current levels by an average of about $1.0 to 1.5 million per quarter over this period. We believe that these investments are necessary to grow our user base and preserve our leadership position in the Indian online space and secure the long term future of our business."
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