Page last updated at 00:59 GMT, Wednesday, 21 May 2008 01:59 UK

Social networking sites eye India

By Neil Heathcote
Editor, India Business Report, BBC World

MySpace advert
Future fortunes are in sight in India

India is being heavily wooed by the giants of the internet, with both YouTube and MySpace having just set up dedicated Indian sites.

MySpace has opted to launch with local bands. YouTube chose a magician.

But both sides have the same audience firmly in their sights - young, internet-savvy Indians.

Compared with the West, internet take-up in the subcontinent is not high.

Outside the main cities, relatively few homes have computers, and broadband is being rolled out at snail's pace and is pitched primarily at the corporate sector.

So why this sudden rush of interest?

More users

Both YouTube and MySpace companies are dazzled by the sheer numbers involved.

YouTube's international manager Sakina Arsiwala
Our focus on India is not monetisation at all right now
You Tube's international manager Sakina Arsiwala

"If you look at percentages, it's low at present," says YouTube's international manager Sakina Arsiwala.

"But if you look at absolute numbers, there are more people online than there are in some countries."

MySpace's chief operating officer Amit Kapur highlights the example set by countries such as China.

"If you look at the sorts of investments that are going on in infrastructure, and how people are using the internet, you're at a critical point right now, where you're going to see internet usage take off."

Shared confidence

One phenomenon in particular is fuelling this confidence, namely the rapid spread of mobile phones, even deep into the countryside.

You're at a critical point right now, where you're going to see internet usage take off
MySpace's chief operating officer Amit Kapur

It offers the tantalising prospect that India could leapfrog the west by moving straight to a mobile internet.

What would that mean in practice?

Both firms are rather shy of putting concrete numbers to their plans.

"We see this as a very long-term opportunity," according to MySpace.

"When we look at India we look at it in terms of a range of five to 10 years out."

But they are not alone in their confidence.

YouTube has signed up a string of local media partners to put their content online - from Bollywood producers to Institutes of Technology.

Many of them hope it will raise their profile on the global stage.

"A lot of partners see that as a huge value add," says Ms Arsiwala.

"The fact that now people anywhere in the world can get access to their content, whether they use it as a promotional tool, a marketing tool, or even as a tool to give more content away for free.

"That spurs more economic value for them, in terms of ticket sales or whatever."

Golden age

What's less clear is when YouTube itself will get the numbers to add up.

Other sites can count on online advertising.

But YouTube is still grappling with ways to make the site profitable without killing off what everyone likes about it.

"Our focus on India is not monetisation at all right now," says Ms Arsiwala.

"We want to have a system where everyone who's a creator makes money.

"What would work in the video space, and how do we get there without killing the user experience? That's the challenge we're trying to solve."

"MySpace is counting on online advertising to bring in the profits - an area it believes will take off as more people get connected.

In the meantime, internet users in India may have something of a golden age to look forward to.

Companies are falling over themselves to highlight what they can do for India, not what India can do for them.

All this competition will ensure that home-grown sites keep innovating - while the deep pockets of both YouTube and MySpace will mean more choice for web-surfers.

And all of it for free.

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