Gondal boy ventures into Web 2.0 space, with a terrible bet (IMHO)
Just read about Indiagames famed Vishal Gondal investing 2.0 cr to 3.5cr in a third party hosted blog platform instablogs. Just a couple of points to be made in regards to this…
Firstly, the technolgoy is basic, freely available and easy to setup a clone in under 30 minutes. (hint MU Wordpress). So, the reason to put in the said amounts better be to draw in in a much larger number of desi bloggers via online and offline advertising. Which actually should not be the case - as any Web2.0 successful model should be able to grow in terms of traffic with the inbuilt viral network-driven model.
Further - with current traffic of 25 2.5 million page views per month - that they are (debate-ably) claiming, would generate at the most $2500 per month as an upper limit (at a $1 CPM). I really dont see the wisdom in putting in $500k+ for these kind of returns - unless they have something else up their sleeves (note: subscription/paid model wont work here, and admoney-4-eyeballs is the only way out).
Plus, there is fierce competition from plenty of similar desi models like blogadda.com, as well as every desi Social Network - because they ALL have blogging built in.
Finally, there the international third party hosted blogs that are way better in terms of technology, features and yes - the all important bonus Search Engine traffic for blogging on their platform! (ie. blogspot-google). So, its wiser, even as an Indian blogger for me to setup on blogspot. Why? because its got a lot of google love and you get traffic almost overnight by blogging on blogspot. So, why would i blog on instablog?
Mr Gondal - there’s tons of better web two point ooh models out there that would’ve been a better bet. Just look around carefully. The gems are not easily visible. 
— Vishal Lamba Filed under: Uncategorized
hi vishal,
thought i do partially agree with the article, it must be takes consideration that investments are not just made for their “current revenue”, but also for strategic reasons,
and lastly, those instablog guys posted a fat number as revenue, (if you calculate it backwards it comes out to be around 10$ CPM)
$10 CPM is not realistic and is highly inflated for web CPM, unless they are talking mobile wap CPM or in game ads… which is definitely not the case. Its just a very bad investment - with no real potential in the short and long run - as the model itself is not anything unique - although that is not a direct factor for the low potential. Its just not buzzy enough and if Gondal has 2.5cr to put in - there are other hot web2 companies doing some good stuff (limited though still as most are copycats). So, I don’t really blame Gondal - he probably has limited exposure in this space and hence the bad call. but really, he should’ve done his homework. This is a mini-version of the crappy HT-desimartini deal. Although, I do hope it works out for him, I doubt it really will.
umm.. and just one more thing,
25 mil page views
= 25 000 000 page views
@ 1$ cpm
= 25 000 $ / mth
It is 2.5 million page views per month and not 25 million. Sorry. I double checked again…
http://www.alootechie.net/content/instablogs-raises-funding-indiagames-founder-vishal-gondal