Rediff.Com Reports Results For The Second Quarter

Ended September 30, 2007

Mumbai, India, November 01, 2007.

Rediff.com India Limited (NASDAQ: REDF), one of the leading worldwide online providers of news, information, communication, entertainment and shopping services to Indians worldwide, today announced its financial results for the second quarter ended September 30, 2007.

Performance Highlights :

Financial Results for the Quarter Ended September 30, 2007

• Revenues for the quarter ended September 30, 2007 totaled US$7.86 million, an increase of 18% over revenues from the quarter ended September 30, 2006. 
• India Online revenues, which include advertising and fee-based revenues, for the quarter ended September 30, 2007 totaled US$5.73 million, an increase of 22% compared to India Online revenues for the quarter ended September 30, 2006.
• US Publishing revenues for the quarter ended September 30, 2007 totaled US$2.13 million, an increase of 9% over US Publishing revenues for the quarter ended September 30, 2006.
• Gross margins increased to 82% for the quarter ended September 30, 2007, compared to 80% for the quarter ended September 30, 2006.
  
  
• Operating EBITDA decreased marginally to US$1.04 million for the quarter ended September 30, 2007, compared to US$1.14 million for the quarter ended September 30, 2006.
• Net income for the quarter ended September 30, 2007 was US$0.89 million, or 3.04 cents per ADS, compared to a net income of US$1.50 million, or 5.14 cents per ADS, for the quarter ended September 30, 2006.

Registered Users

• Registered users grew to 59.8 million as of September 30, 2007, a 25% increase over the number of registered users as of September 30, 2006.

Advertising Revenues

• Highlights and trends for the India Online advertising business include:

1.       The number of companies advertising on Rediff’s website for the quarter ended September 30, 2007 totaled approximately 190, as compared to approximately 160 during the same quarter in the prior fiscal year.

2.       The following five industry categories accounted for 56% of the Company’s advertising revenues for the quarter ended September 30, 2007: Consumer Finance, Employment, Travel, Matrimonial and Insurance.

3.       For the quarter ended September 30, 2007, the top 10 advertisers contributed approximately 45% of advertising revenue for the India Online advertising business, compared to 57% during the same period in the prior fiscal year.

Product Innovation

• The Company’s video platform iShare launched last quarter has gathered momentum. The Company continued to enhance the platform: a new video and audio player with auto play, facility to view videos in full screen mode and a lighter version of the iShare client are some of the new features added.

• The Company is beta testing Rediff Language Search in eight Indian languages. It allows users to enter Indian language queries using QWERTY keyboards and obtain results in their desired language.

• The Company enhanced its Consumer Finance Channel, Moneywiz with Market Voices, a live running commentary. This commentary is updated every few minutes during the trading hours of the Indian stock markets.

Financial Results

Revenues

Revenues for the quarter ended September 30, 2007 increased by 18% to US$7.86 million, as compared to US$6.66 million in the same quarter last fiscal year.

Revenues from India Online, which comprised online advertising and fee-based services, increased by 22% to US$5.73 million during the quarter ended September 30, 2007 compared to US$4.71 million during the same quarter last fiscal year.

Revenues from US Publishing for the quarter ended September 30, 2007 increased by 9% to US$2.13 million from US$1.95 million during the same quarter last fiscal year.  

Gross Margin

Gross margins increased to 82% for the quarter ended September 30, 2007 as compared to 80% for the quarter ended September 30, 2006.

Operating Expenses

Operating expenses increased by 29% to US$5.39 million for the quarter ended September 30, 2007, compared to US$4.19 million for the same quarter last fiscal year, primarily due to higher product development and general and administrative costs. Operating expenses for the quarter ended September 30, 2007 included a charge of US$0.41 million on account of stock-based compensation cost compared to US$0.23 million for the same quarter last year.

Operating EBITDA 

Operating EBITDA decreased marginally to US$1.04 million for the quarter ended September 30, 2007 as compared to an Operating EBITDA of US$1.14 million for the corresponding quarter last fiscal year.

Depreciation, Interest Income and Foreign Exchange

Depreciation and amortization expenses increased to US$1.46 million for the quarter ended September 30, 2007 compared to US$0.60 million for the same quarter last fiscal year.

Interest income increased to US$1.44 million for the quarter ended September 30, 2007 compared to US$0.91 million for the same quarter last fiscal year.

There was a foreign exchange loss of US$0.12 million during the quarter ended September 30, 2007 arising from the conversion of cash deposits and other balances held in US Dollars into the Company’s functional currency (the Indian Rupee) for financial reporting purposes due to the strengthening of the Indian Rupee against the US Dollar.

Net Income

Net income for the quarter ended September 30, 2007 was US$0.89 million, or 3.04 cents per ADS, compared to a net income of US$1.50 million, or 5.14 cents per ADS, for the same quarter last fiscal year.

Total cash and cash equivalents and short term deposits with banks as of September 30, 2007 was approximately US$59.1 million.

About Rediff.com

Rediff.com (NASDAQ: REDF) is one of the premier worldwide online providers of news, information, communication, entertainment and shopping services to Indians worldwide. Rediff.com provides a platform for Indians worldwide to connect with one another online. Founded in 1996, Rediff.com is headquartered in Mumbai, India with offices in New Delhi and New York, USA.

Table to follow

STATEMENT OF OPERATIONS
Quarter Ended September 30, 2007

                                                                                    All figures are in US$ million

Notes

• Each ADS represents one half of an equity share.

• The above numbers are subject to audit and while no significant changes are anticipated, an audit could result in adjustments which would result in the audited numbers varying from the numbers set forth above.

Non-GAAP Measures Note

Operating EBITDA and non-GAAP Operating Expenses are the non-GAAP measures in this press release. These measurements are not recognized under generally accepted accounting principles (“GAAP”).

Operating EBITDA represents income (loss) from operations prior to adjustments for depreciation/ amortization, non-recurring items and other income or expense and tax. However, other companies may calculate operating EBITDA differently. Operating EBITDA is not intended to represent cash flows as defined by generally accepted accounting principles and should not be considered as an indicator of cash flow from operations. We have included information concerning operating EBITDA in this press release because management and our board of directors use it as a measure of our performance. In addition, future investment and capital allocation decisions are based on operating EBITDA. Investors and industry analysts use operating EBITDA to measure the Company’s performance to historic results and our peer group. The reconciliation between operating EBITDA and net income (loss), the GAAP measure, is as follows:

RECONCILIATION FROM OPERATING EBITDA TO NET INCOME
Quarter Ended September 30, 2007

(All figures are in US$ million)

Non-GAAP operating expenses represent our operating expenses comprised of sales and marketing, product development and general and administrative expenses net of depreciation and amortization. We have used the non-GAAP operating expense to compute our operating EBITDA. A reconciliation of the GAAP operating expense to non-GAAP operating expense is as follows:

RECONCILIATION FROM GAAP TO NON-GAAP OPERATING EXPENSES
Quarter Ended September 30, 2007

(All figures are in US$ million)

For further details contact:

Debabrata Saha

Investor Relations and Corporate Affairs Contact

Rediff.com India Limited

Email: investor@rediff.co.in
Tel.: +91-22-2444-9144 Extn.: 116

Fax.: +91-22-2444-6837