They are young. They are all batchmates from IIT and they think they are on to something truly big – ads on mobile Internet. Meet mKhoj and its founders – Naveen Tewari, Amit Gupta and Abhay Singhal. What made them jump into it? In the late 1990s, the Internet was spreading rapidly and there was money to be made in developing sites that dominated the Internet such as Yahoo! and Google. The threesome wondered what opportunities India would offer in this space. The most significant revolution in our lives over the past decade is the use of mobile telephony. Mobile phones have reached every corner of India, even to areas where good roads have not reached. There are close to 200 million mobile-users in India today and millions are getting added each month. By 2010, the number could be 500 million. This revolution has opened up a host of opportunities for innovative players.

Tewari articulates the opportunity for mKhoj: “When we looked at our country, we saw that the PC penetration was low, the cost of owning PCs was high and there existed huge infrastructural problems. We knew that the Internet would not bypass India but that the opportunity would play out differently. It could be done through the mobile phones and not the traditional PC route. A lot of people disagreed with us, but that is how we saw things. We saw that mobile is a device which is in everyone’s hands. In fact, the way a mobile is used in India is very different from how it is used in the rest of the world. It is a primary device; it is a social status symbol; it is the first item that people buy and they spend disproportionately high amounts on the handsets. This was an important factor. The other factors were that the operators were spending more on the data; the quality of data is improving; speeds are improving and the cost of data is coming down.”

Tewari’s guess was right. The rate of Internet access via mobile has increased, especially in Tier-II and Tier-III cities where people do not have the resources to acquire a PC. While this was the big picture – the use of Internet via mobile phones – the question was how to travel the path to create an advertisement model for mobile Internet. “We did not want to be in the content provider segment. Rather, we wanted to be at the heart of the system; we wanted to be in the ad network space which sells ads on the Internet when people are surfing on their mobile phones. Ads are the only way that people make money on the Internet. We wanted to be that part of the value chain which is serving these ads on the Internet phone. The money lay in a space where we were the aggregators of ads. We have a sales force which goes out and gets the ads. We use our technology which is proprietary, unique and designed in a way that when you surf the Internet via the phone, depending upon the user profile, the ads would flash. The program is uniquely real-time and fine-tuned to such an extent that when two people surf the same site, the ads that would be flashed would vary depending on their profiles.”

The Model
mKhoj partners with a site and does not force itself as pop-ups. Neither does it send the SMS uniformly to all. It partners with the content providers who share their space with mKhoj, which collects advertisement money and shares it with the site owners, while the advertisers are able to reach the right target audience. mKhoj has partnered with 300 sites so far. It recently did a campaign with Reebok, and Tewari claims that Reebok was elated with the result. “They got an excellent brand recall and reached the right audiences – youngsters who are their potential customers. Our technology can fine-tune an offering to such an extent that you see a product, identify the store closest to you and you can purchase it. We are just scratching the surface of the utilisation of this technology.” Tewari and his team claim that advertisers are also tired of doing the same hoardings and ads on television soaps without being able to reach their target audience. Now, they are able to reach their exact target audience all the time. “Unlike advertisements on hoardings and television, ads on the mobile rarely get missed. As the screen is small, the ad reaches out to you. The interaction on the mobile Internet is also a prolonged one,” they say.

Until now, mKhoj has been attracting a certain kind of advertiser. Since mobile Internet advertising is a new medium, it is used by companies which are more youth-oriented and technology-savvy. But mKhoj has bigger plans. Says Amit Gupta, VP business development: “The mobile advertising market has not even started to develop. We are currently in WAP and SMS-based advertising and are trying to get in more features, value-addition and various services which we can offer. Other than providing pure services, we are assisting our clients to reach effectively and study the results of advertising.”

Beyond that, mKhoj wants to be a global player. It believes that its model will work well in certain countries. The mobile market is huge in India and China, but not in the rest of the world. “In the US, Internet usage developed via the PC which the rest of the world adopted. Similarly, we have Internet usage story via the mobile, which we would take to the rest of the world such as Asia Pacific, the UAE and then Africa. This is the prime reason why venture capitalists too have the confidence in us,” says Tewari. The initial money came from the founders. Later, when the idea grew and needed more capital, it got US$0.5 million funding in 2006 and $7.1 million in April 2008 from Kleiner Perkins Caufield & Byers (KPCB) and Sherpalo Ventures of Ram Shriram who was one of the founders of Google. KPCB is a top VC which invested in Google, Amazon and AOL. This would open the right doors for mKhoj internationally. mKhoj is expanding at great speed. It has set up two new offices, one at Singapore and the other at Bengaluru. In less than two years, it has grown from a staff strength of 15 to 100. The next time you see a mobile ad while surfing the Net on your cell phone, remember it could have been delivered by mKhoj.

Featured on