Web2.0 acquisitions drive big-ticket ambitions

HYDERABAD: It could be a YouTube or Skype in the making. Or at least that is what the promoters of Northgate Technologies hope Globe7, the free downloadable softphone and online TV service of the company, will soon be.

And if the current records are anything to go by Globe7 could well be on its way to being a major acquisition target by the Googles and eBays of the world.

Google acquired YouTube $1.65 billion, while eBay bagged Skpye for and $2.6 billion.

Market rumours say companies like Yahoo are interested in the firm. Hyderabad-based Venkat Meenavalli, the CMD of Northgate, however denies any parleys though the company does work with peers in the industry. “We are not ready to be acquired yet though we are open to it the idea down the line,” he said.

If sudden interest is being shown in Globe7, a UK registered subsidiary of Northgate, it is not surprising. In just nine months of its launch, Globe7 has to its credit over 21 million downloads making it the second most popular VoIP provider on the Internet after Skype.

The free downloadable VoIP software that converts a PC or laptop into a net telephone like Skype, also bundles elements of YouTube with its free messaging, voice and video digital media platform.

If that is not enough, Globe7 will soon be available in the physical and mobile form with Northgate slated to launch across the world a host of WiFi and VoIP-based gadgets to provide from telephone services to video downloads and MP3 music.

“Our advantage is that we began basically as a telecom aggregating company and have VoIP licenses in several countries,” said Meenavalli.  The firm is targeting an 80% to 100% growth over the next two years.

Much of this growth will be driven by launch of new services, applications and geographies like China and the US in the near future. While Northgate Technologies is the first VoIP licensee in Hong Kong,  it already operates a service in Singapore.

The potential market of 400 million users in China is driving Northgate to the country, with its online gaming applications on Globe7 to be launched soon.

Given its all-things-to-all people approach, Globe7 will have a higher stickiness compared with the peers in the space, Meenavalli said.

“The trick is to build the critical mass first. There are bigger companies that will monetise it later,” he said, pointing out that the Google-MySpace $900 million deal for search marketing proves just this.

The company will go in for a valuation for Globe7 in March next year, apart from applying for a VoIP license in India. Northgate Technologies,  listed on the Indian bourses, it could perhaps also go in for an international listing one year down the line, he said.