[January 27, 2015]

Rediff's Marketplace Boosts Online Revenues

Rediff's Marketplace business where users coming for strong news, information and communication services are served products and services from individual professionals, merchants and large enterprises, is now the second highest contributor to overall revenues, after the display advertising business. The share of online revenue from the marketplace grew to 28% in the immediate past quarter, from a 23% share in the same quarter last year.

Revenues from the Enterprise Email business and Online Shopping Marketplace for the quarter grew 12% and 22%, respectively, on a year over year basis, while the Local TV Advertising revenues grew 1.4 times for the quarter compared to the same period the prior year, helping to some extent offset a decline of 22% in advertising revenue. Overall revenue for the quarter ended December 31, 2014, declined 5% compared to the corresponding quarter last year.

The global internet market is rapidly moving to smartphone based access and as a consequence posing a challenge for display advertising dependent internet media companies. A 17 million unique user base, as certified by ComScore, with a high engagement of 403 million minutes per month and an average time spent of 23 minutes per visitor per month, and an efficient marketplace on the other side uniquely positions us for growth.

"A large portion (70%) of revenue from our Marketplace is primarily generated by our own users as compared to paid users. Our current efforts are focused on driving our marketplace revenues from our own users and we believe there is significant room for growth: less than one percent of our users shop on any given day, and we are deploying data analytics and new algorithms to better match our users and our products put on our site by merchants and take this rate up further," said Ajit Balakrishnan, Chairman and CEO, Rediff.com India Ltd. (News - Alert)

Further details of Rediff.com's results for the third fiscal quarter ended December 31, 2014 are appended in tabular form to this press release. A script of the earnings result conference call held on January 27, 2015 will also be made available on Rediff's Investor Information website at investor.rediff.com.

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. Founded in 1996, Rediff.com is headquartered in Mumbai, India with offices in New Delhi, India and New York, USA.

Safe Harbor

Except for historical information and discussions contained herein, statements included in this release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and reflect our current expectations. Forward-looking statements are identified by certain words or phrases such as "may", "will", "aim", "will likely result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will pursue" and similar expressions or variations of such expressions. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be projected by these forward looking statements. These risks and uncertainties include but are not limited to the slowdown in the economies worldwide and in the sectors in which our clients are based, the slowdown in the Internet and IT sectors world-wide, competition, success of our past and future acquisitions, attracting, recruiting and retaining highly skilled employees, technology, acceptance of new products and services, the development of broadband Internet and 3G networks in India, legal and regulatory policies, managing risks associated with customer products, the wide spread acceptance of the Internet as well as other risks detailed in the Form 20-F and other reports filed by Rediff.com India Limited with the U.S. Securities and Exchange Commission. Rediff.com India Limited and its subsidiaries may, from time to time, make additional written and oral forward looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. Rediff.com India Limited does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.

Notes

• Each ADS represents one half of an equity share.
• The above numbers are subject to audit. An audit could result in adjustments which would result in the audited numbers varying from the numbers set forth above.
• The company established an ESOP trust for the benefit of employees, which has acquired 1,015,000 shares (equivalent to 2,030,000 ADSs). These shares are treated as treasury stock and therefore are excluded from the EPS calculations.

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 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 compared to historic results and our peer group. The reconciliation between Operating EBITDA and net loss, the GAAP measure, is as follows:

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

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