India, Jan. 6 -- As a part of its restructuring to consolidate its business into TV and other 'emerging' businesses, the Network18 group had last month, sought shareholder approval for merging its digital business owned by Web18, including in.com, cricketnext.com, ibnlive.com, biztech2.com, indiwo.com, josh18.com, tech2.com, buzz18.com, into Network18 Media & Investments Limited. The yellow pages business of Infomedia18 (which includes Burrp and AskMe.in) the demerged business of Television Eighteen India Limited, Television Eighteen Commoditiescontrol.com Limited, Care Websites Private Limited, RVT Investments Private Limited and Network18 India Holdings Private Limited will also be moved to Network18.
However, e-eighteen.com Ltd, which owns PowerYourTrade.com and Web18?s flagship Moneycontrol.com is, at present, not being merged. A Network18 spokesperson told MediaNama that "We don't own the complete shareholding in e-eighteen, and there's a court case going on. Until that gets disposed off, we cant merge it." However, e-eighteen Ltd will be a subsidiary of Network18.
What This Means For Web18 Stakeholders?
- No IPO in the near future: With all the assets of Web18 being transferred to Network18, Web18 will cease to be a separate entity. Which means that the NASDAQ registration for Web18 comes to naught. The Network18 spokesperson, however, said that there will be no listing at this stage, but nothing stops the company from hiving off the business in the future, and looking to list it again.
- Nokia Growth Partners had apparently invested $10 million in Web18 in 2009. The Network18 spokesperson told MediaNama that they will settle with NGP, but declined to comment on details. Tracer Capital, from whom Web18 had previously raised $10 million, is no longer a shareholder; their stake had been bought out by Network18 long ago, according to the spokesperson.
- ESOPS: Web18 had given employees ESOPS around a year ago. "They'll be exchanged for Network18 ESOPS," the Network18 spokesperson told MediaNama.
- TV18 Shareholders: Shareholders of TV18, which owned most of Web18, will get stock in Network18 following the restructuring.
What this restructuring also means is that Network18 will probably no longer provide a detailed quarterly Profit and Loss account for Web18, instead, show limited segment revenue for the digital business. That's one earnings report less for us to cover.
The merger into Network18 is a sad end for a company that had IPO aspirations, and tried to do too much too quickly, in a market where most Internet portal businesses struggle to scale, and most scaled Internet businesses are struggling to sustain; the financials of many Internet companies in India don't paint a pretty picture.
Published by HT Syndication with permission from Medianama.
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