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November 09, 2006

Prospects for Indian Social Networking Sites

In the wake of the YouTube acquisition, Economic Times has a feature on Indian online social networking startups and their prospects.

Sources say six other start-ups are looking to join the ranks of existing sites such as,,, meravideo .com, and to roll out their versions of social networking channels in India. "This is one of the most interesting areas since globally also it has been quite a major hit with very large exits. We are very keen to make investments in this space in India," said Alok Mittal, India head Canaan Partners.

Though the idea is clearly to sell-out after building a certain scale, skeptics feel there is a good chance that some of the start-ups may fail to create a sound business model. In the online space, a proven business model, besides being profitable, needs to focus on innovation and creativity. Video and music are some elements that are essential, not just the text messaging which is being adopted by most start-ups .

Arun Natarajan is the Founder of Venture Intelligence, which tracks private equity and venture capital in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.