Is It Time For Local Language on the Internet?

Local language internet has been a key topic of debate and anticipation in the Indian market. A question that comes to my mind when thinking of local language on the internet is - should there be any local language internet at all? The answer is straight and simple - The power of internet lies in micro-segmentation and there is no need to dump any language because it is not English.

Indian languages like Hindi and Telugu are few of the most spoken languages in the world. However, the number of local languages websites in India stands at a disappointing 1,249. So why it is that local language have not been taken up seriously on the internet?

 Is there a market on local language internet in India - honestly, I don’t see it. Though The Economic Times and Google amongst others have launched local language sites; is not an evidence of a market being there - it is simply a strategy to cover bases. The IAMAI pegs the number of language blogs at a mere 523 – a very small figure to create any decent sized business.
o This in turn is also connected to regulatory hassles, technological hurdles, and limited penetration of the Internet. There are only 5.5 million regional language internet users (IMRB). That is a small number considering India’s population. First the Internet has to reach the people. Only then the local Internet shall reach the masses.
o Another point of view here is the relevance of local language content. A lot of reports have suggested that India might have the largest or the second largest number of English speaking population. With Internet reaching the villages now — a new crop of English classes for the masses has sprung up. Moreover, India has a large population under 30 and that segment is topping up their English skills. The local languages are still spoken by the older majority. Also, mixing up the local language with English is allowing people to pickup the language if they don’t understand it already.

 Market dynamics - while most people say that there isn’t enough local language content available, content providers face the challenge that there isn’t any substantial demand for local language content. The reality is that content developers need to see some traffic before designing language content.

 User Generated Content (UGC) and Mobile - both these spaces are at a very preliminary stage when it comes to local language. The experience on mobile would suggest that roman script might get adopted for short format content for local language use. The key reason behind lower usage of SMS in lower-ARPU subs is not language, its price sensitivity.

 Growth curve - again, I fail to see the discontinuity here - there is no sudden jump expected in internet penetration which brings in a large base of non-English users in reach, there is no authoring tools which seem to have the potential to train millions of users in short period of times, the progress on fonts has been slow and steady over past few years.
o A positive development on this front has been the initiatives by Department of Information Technology (DIT). DIT is working on software tools and fonts which can help PCs and websites decipher content in the country’s 22 languages recognized by the Constitution.

So where is the opportunity for local language that everybody is talking about? Videos in my mind, is clearly one area where local language internet rules, largely because the experience is seamless and it fits nicely in our consumption patterns. On the printed word though, we may continue to see English as the dominant language for a longer period than most expect.

Alok Mittal, General Partner

Portfolio News

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LendingClub.com, a US-based person-to-person (P2P) lending network recently closed $12 million Series B round of funding. Canaan Partners, an existing investor also participated in the round. The additional capital will allow LendingClub.com to continue to expand its capabilities and accelerate the growth of its customer base. Lending.com pairs borrowers and lenders through a matching system that combines a search algorithm, credit decisioning and social networking.

About Canaan Partners

Canaan Partners invests in entrepreneurs and works alongside them to turn visionary ideas into valuable companies. Since 1987, the firm has catalyzed the growth of disruptive technology startups and healthcare companies revolutionizing the practice of medicine. With $3.5 billion under management and more than 85 acquisitions and 53 IPOs to date, Canaan has funded technology companies such as SuccessFactors (NASDAQ: SFSF), DoubleClick (acquired by Google), Match.com (acquired by IAC), Acme Packet (NASDAQ: APKT), Active Network (NYSE: ACTV) and SandForce (acquired by LSI), as well as notable healthcare companies such as Advanced BioHealing (acquired by Shire); Advance PCS (acquired by Caremark), BiPar Sciences (acquired by Sanofi); Calixa Therapeutics (acquired by Cubist); Cerexa Pharmaceuticals (acquired by Forest Labs) and Peninsula Pharmaceuticals (acquired by Johnson & Johnson). Current technology investments include Tremor Video, KABAM, Lending Club, Blip, Zoosk and Blurb in the US; BharatMatrimony, LoyaltyRewardz, Naaptol and UnitedLex in India; and PrimeSense, LiveU and N-trig in Israel. The Canaan healthcare portfolio includes emerging leaders such as Liquidia Technologies, Theraclone Sciences, Durata, Civitas Therapeutics, Elevation Pharmaceuticals and DICOM Grid. Canaan maintains a presence in the global innovation hubs of New York, SiliconValley, India and Israel . For more information visit www.canaan.com or www.facebook.com/canaanpartners.

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