Internet news portals eye expansion after gloom
Fitri Wulandari, The Jakarta Post, Jakarta
All is quiet in the local online media industry after the dotcom collapse in America emptied out the industry, but months of restructuring has shifted a handful of survivors from survival mode to expansion.
As the subsidiary of the giant daily newspaper Kompas, PT Kompas Cyber Media (KCM)'s strategy is providing news over the Internet that is accurate and credible. Now it is considering selling books online as well, KCM operational director Andrey Andoko said.
"We're still focused on delivering news with high accuracy and credibility," he told The Jakarta Post last week.
Real time news updates can be found at www.kompas.com, which attracts about 600,000 to 700,000 hits daily.
This has helped it generate advertisement revenues of Rp 300 million (about US$32,000) a month. Its only e-commerce venture so far is selling classified ads for Kompas, earning Rp 60 million per month.
"Since the beginning, we didn't want to go all out, we didn't want to run out of breath and spoil our chance to grow," Andrey said.
KCM's cautiousness roots with the slowing growth of Internet usage in Indonesia. The Indonesian Internet Service Providers (APJII) said growth of Internet users was slowing after doubling every year for the past three years.
For this year, APJII has said the number of people using the Internet would reach just 5 million from 4.2 million in 2001.
M-Web is another major online media player and is a subsidiary of South-Africa based telecommunications and Internet firm Myriad International Holding (MIH).
It burst onto the local scene with a string of acquisitions of local news portals since 2000, combining Satunet.com, Astaga.com, and kafegaul.com.
The three local websites continue to operate independently but need strict cost cutting measures to prevent them from collapsing altogether.
Like KCM, M-WEB relies on advertisements for its revenue and has also what it calls "value added features" for which users must pay. One feature allows browsers to download mobile phone ring tones or news, provided however that the mobile phone handset supports technologies such as Wireless Application Protocol, better known as WAP.
Page hits stand at 1.6 million a day, according to an M-Web executive who declined to be named.
He did not say how much the company made it terms of advertisements and e-commerce revenues, but said M-Web planned to develop its value added features to boost its bottomline.
"The business climate isn't very good because of the stagnant growth in Internet users ... so it's rather difficult right now but there is a chance of an upturn," the source said.
KCM's Andrey agreed that with conditions like this, it was best to refrain from aggressive expansion plans.
"Unlike the newspaper, TV or radio industry, the online media industry is still immature. People are unfamiliar with this form of media. However once they get to know it, we can expand our business," he said.
Indonesia's leading online media, Detik.com, has also felt the brunt of the dotcom crash. Last year Detik.com closed down inefficient business units and laid off a number of staff.
However chief editor Budiono Darsono said the website was now aiming for a richer content in partnership with several publishing and media companies.
It also planned additional features to provide revenue next to those from advertising, he said.
He said over the past three months, advertising revenue had increased almost 200 percent to Rp 1.1 billion.
Boediono attributed this to several companies shifting their advertisement spending from other websites to Detik.com.
Detik.com had 1.7 million hits per day, he claimed.
However, any expansion plans were on hold pending its internal restructuring, he added.
"Until the end of this year, we'll keep strengthening our online and web services; starting next year, however, we're ready to venture into other businesses," he said.
Budiono, as did Andrey and the M-Web source, warned that even though many competitors had folded since last year, the small share of advertisement spending over the Internet required the remaining players to improve their quality further.
"Indeed there are only a few players left and there's hardly competition but we have to do something to stay in the business," Andrey said.
Budiono added the battle was now in the inside of the company rather than outside. "And this is more difficult."