With a PC penetration rate of 2%, vs. 60% in developed economies, India's Internet market is miniscule. According to the Internet and Mobile Association of India, there are 37 million Internet users, likely to go up to more than 54 million in 2008. And online advertising is a mere $25 million, just a fraction of India's total $2.5 billion advertising industry. In comparison, China's online market is said to be around $600 million.

Mobile-based services, however, are a huge opportunity with more than 200 million cell phone users in India. As Internet connectivity and broadband usage improves, Net advertising on mobiles could be big, say players. "With Indian consumers beginning to treat the Internet as a friend, reaching out to them becomes imperative," says Yahoo's Zacharias.

MULTIPLE LANGUAGES. "For us, it is both strategic and opportunity driven," says Jaspreet Bindra, country manager at MSN India. With more than 75 million Indians who speak English, the market has room to grow. Yet local language content is key, too. "We have to prepare for this and then go where our advertisers go," he adds.

Two-thirds of India's population live in villages, and today the five most-read publications are still regional. Regional television channels have higher viewership than their English counterparts. "That India is rich in language content anyway, makes it easier," says Mohit Hira, director of content and marketing at Indiatimes.

So portals are also beefing up their offerings. Having begun with pure content, they now have a range of services and are looking for more. Big on the popularity chart are airline and hotel bookings, astrology, matrimony, and e-commerce sites, which bring in cash. The players are not revealing their India revenues, but say that even as they want to grow organically, they have a war chest and M&A teams in place to grab any good buy.

Yahoo plans to bring in its Yahoo Finance and other services to reach India's huge market of youthful online readers. From all indications, it seems India is shaping up to be an interesting playground for global Net companies.