George Zacharias, Managing Director, Yahoo! India

Yahoo! sees a lot of opportunities in mail, instant messenger, search, in communication products, in community services and in content across various languages. I think e-commerce will do very well in India, too, though we don't have much to offer in this field right now. And then Internet itself is a really fantastic opportunity that we see in India.

George Zacharias joined Yahoo! India as MD in February 2006. Prior to this, he was President and Chief Operating Officer of Sify Ltd, which he had joined in 2000. He had played a key role in formulating and executing the strategies that turned around the company, making it a profitable venture.

Zacharias had joined Sify from Madura Coats, Bangalore, where he had a long stint of 16 years. In 1997, he took over as President of Madura Garments.

Zacharias has a degree in Chemical Engineering from Nagpur University and a PGDBM from XLRI, Jamshedpur. In conversation with exchange4media's Asit Ranjan Mishra, Zacharias speaks about Yahoo!'s India strategy, competition, search engine marketing and some very candid comments about Google.

Q. But why a matrimonial company?

Well, one of the important things that we have to do is to find out how to make more applications that are relevant to Indians, because only if we do that will we grow the Internet in India faster. In fact, the key is to grow the medium as fast as possible. Our real challenge is non-consumption not competition. So, I think Bharat Matrimony does a fantastic job in building an application which is very engaging, very powerful, and potentially life changing for many millions of people in India.

I think a good portal is built by several components. There are communication products, community products, content products and search products of various kinds. All these are necessary. So, Yahoo! is in all these areas. But our intent is not to be a content generator, we might do it a bit here and there, but our real mission is as a technological company we will be an aggregator of content.

You bet! It will happen, but I can't you tell when.

In different countries we have different strategies. If you look at our revenue worldwide, nearly 50 per cent of it comes from display advertising and about 50 per cent comes from search marketing. There is some that comes from job verticals, which is not very significant. The point I am trying to make is that display advertising and search marketing are two major engines for growth for us and in certain specific vertical market place, we work with partners rather than trying to build the sites ourselves.

(Intervenes) ...because nobody else was there!

Quite possible.

You are right. Well, there are commercial arrangements that have to be worked as well.

In certain countries around the world, page views of MSN are monitised by YSM. In some other countries Microsoft does it by itself.

Firstly, I am very optimistic, the reason being that less than 2 per cent of the people who will eventually come online are currently online in India. So, there is a lot of room for growth. In some of the most sophisticated markets in the world like Japan, Korea, and Taiwan, Yahoo! dominates search marketing. And Yahoo! is a strong challenger in many other markets like the US and Europe. So, the way to look at it is that search is also evolving. We are moving into newer areas of search, including social search and knowledge search. Yahoo! with its huge Indian and worldwide community can actually bring some strength in this area that advertisers will love to have. I think advertisers always love to have a choice.

Web 2.0 is a catch-all term for a newer phase that lot of websites have entered into which often involves a lot of user generated content, a lot of viral marketing, use of new technology which is commonly put under an umbrella called Ajax. Web 2.0 represents a huge opportunity for companies like Yahoo! as well as users to interact with the Internet in a very much engaged way. People spend a lot more time on it, they interact a lot more with each other.

According to most third party estimates, Hotmail and Rediff are very large mail providers in India and both seem to be growing quite well. Gmail, too, is growing very well. So, we all are very serious competitors.

I think there are a lot of smart people in India. Some of the giant companies want to ramp up in India very, very fast. So there may be a short-term mismatch. But I think that our education system should be able to deliver. Of course, global companies can have the best talent anywhere in the world, not just in India.

I think as of now it is an enabling proposal. We will announce our plans in due course.

We have reached some 25-30 million people who are familiar with English. But we are fast reaching a level where a lot of people are familiar with at least another Indian language. As the Internet penetrates to the next 100-200 million, we will come across a lot of users who are only familiar with their mother tongue. I think it is the nature of the way the Internet will evolve in India. So, it is more of a preparation for what is going to be in three to five years from now.

We don't have any immediate plans. Getting into e-commerce so late when there have been players here for six years, we've got to think!

There are around 30 million or so people using PCs to access the Internet. With India having more than 120 million mobile users, my feeling is that the mobile phone could be an important device to access the Internet. But having said that, mobile is a very small compact device. I really don't know how well all this will play out. But in some way or the other some convergence is happening, mobile phones are getting more powerful, operating systems are getting better. So, we need to keep focus on this platform.

India is very important to Yahoo!'s global strategy. A lot of new users of the Internet will be from emerging countries around the world and India has a large potential population that will come online. In Yahoo!'s quest for being a very large online player across the world, India is a very important partner because of its very rich location for talent, for R&D and engineering.

Firstly, Bharat Matrimony is very well-run, has a good management and is a leader in the online matrimonial space. Yahoo!'s philosophy for growth is to build, buy or partner. In this case we thought that it is much better to partner with a leading vertical in this space. The nature of our partnership with Bharat Matrimony is more of an equity investment in the company.

Yahoo! sees a lot of opportunities in mail, instant messenger, search, in communication products, in community services and in content across various languages. I think e-commerce will do very well in India, too, though we don't have much to offer in this field right now. And then Internet itself is a really fantastic opportunity that we see in India.

World over e-commerce has been a great application on the Internet. Even in India, the IRCTC site has done extremely well. I think India is going through a retail revolution. We may venture into online retail sometime in future, but definitely not in the next 12 to 18 months.