The man who built Naspers, former CEO and soon to be chairman Koos Bekker, is currently on his second year-long sabbatical. As might be expected, the culture which stood the business in such good stead is deeply entrenched in the thinking of the new CEO Bob van Dijk. In today’s CNBC Africa Power Lunch interview, Van Dijk referred to “keeping an open mind” and “starting new things”. Most of the attention, he added, will be in the mobile space because the Naspers vision of the Internet’s future lies very definitely with tablets and smartphones. The company’s global footprint gives it a base from which to draw such conclusions. – AH
ALEC HOGG: Naspers, one of the world’s largest media companies by market value, worth over $50bn, is aiming to transform itself into a predominantly mobile content company. This came through yesterday in an interview that Bob van Dijk – the new Chief Executive of Naspers – had with Reuters. He’s on the line now to give us more of an update. Bob, thanks for joining us. When we spoke a week or so ago, you did explain that around R8bn would be invested into developments by Naspers in the next financial year. This headline that came out yesterday about becoming a predominantly mobile company: is that in line with the investments that you’re making?
BOB VAN DIJK: Thanks for asking the question and I think the introduction you did is very correct in that we are investing quite significantly in being a mobile content player. We’re not trying to be a mobile operator like MTN, but rather in applications that have, and that customers use will be primarily used on mobile devices. We’re investing aggressively to make sure we have the applications out there that get people the best experience.
ALEC HOGG: Your predecessor, who is now going to become Chairman – Koos Bekker – after he’s been on his year’s sabbatical… He once described the strategy as throwing spaghetti against the wall – making lots of small investments and hoping some of them really come home. Well clearly they have in the form of Tencent and others. Is that a similar approach that you’re going to be making?
BOB VAN DIJK: As a company, a lot of our success has turned out from having an open mind, looking at new opportunities, and new ways to deliver either content or communication to our customers and we will certainly keep doing that. I think the change of pace in the Internet is only increasing. It’s not decreasing.
If you don’t start new things and keep an open mind, I think you’ll be stale and obsolete.
ALEC HOGG: At the moment, as far as cash flows are concerned you are still are being supported greatly by the Pay TV side. When do you expect that that might change, given that there’s quite a long gestation period for the Internet companies to be giving you cash back?
BOB VAN DIJK: Some of our Internet companies are already delivering substantially to our bottom line. I think the overall results that we show are very much a mixture of significant investments and further growth, but a number of our core businesses are profitable and generating significant returns. We are quite comfortable that the rest of the businesses, with good execution, will get there as well.
ALEC HOGG: Just as far as the actual cash streams if you like, that are coming through clearly. Tencent is a fantastic company. Are they paying dividends just yet?
BOB VAN DIJK: Tencent has paid dividends in the past, yes.
ALEC HOGG: So is that part of the reinvestment that you’re making then, into new opportunities?
BOB VAN DIJK: I think we see our businesses in a slightly different way. We look at where we see opportunity for growth and our investments are very much driven by what we think will over time, be solutions that customers will like and use, and where we can make good money. The things are therefore, not directly related.
ALEC HOGG: When you say ‘a predominantly mobile company’, just unpack that a little for us, if you would.
BOB VAN DIJK: I’ll give you an example. If you take our Indian market where we are quite well represented, about 70 percent of the usage of, for example, our classifieds business comes from mobile devices. Either people have the OLX application installed or they use Mobile Web Access to use the OLX website, so the majority of the interaction with our product is happening through mobile devices.
ALEC HOGG: How quickly – globally – is this transforming from desktops to tablets and mobiles?
BOB VAN DIJK: The Indian example is an example where we already have well above 50 percent (on mobile). There are other markets, such as Indonesia, where we are running at more than 80 percent of our traffic and usage being mobile. In all markets, it’s changing rather dramatically.
I expect the vast majority of our traffic to be mobile in all our businesses, a year or two from now.
ALEC HOGG: Bob van Dijk is the Chief Executive of Naspers. They’re pretty good at that company, about seeing the future and it’s a business that you just cannot discount. Even though the share price has run as hard as it has, it is still looking to get even stronger growth into the future.
