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Look Homeward, Engineers

Firm Launches Portal for Foreign-Born Professionals to Stay in Touch With Roots

There’s no place like home.

At least, that’s what officials at Yorba Linda software maker Research Engineers Inc. hope as they plunge headfirst into the Internet content business, banking on the universal longing to stay in touch with one’s roots.

The company, which long has specialized in structural engineering software used to design everything from bridges to office buildings, has acquired three Internet-related firms in an attempt to build web sites geared toward natives of India and East Asia who live and work in the United States.

It’s a niche market if there ever was one, but co-founder and president Jyoti Chatterjee said he knows the idea will work, because it’s something he and fellow co-founder and chief executive Amrit Das,themselves born in India,would love to use as consumers.

Investors appear equally sanguine. Over the past three months, REI’s stock has jumped 550% from just over $10 per share to more than $65 per share last week, with a market cap of more than $400 million. Das, who owns 32% of the company, has gained about $110 million on paper.

Second Offering Possible

The soaring stock won’t hurt as the 330-person company seeks out new capital,about $50 million worth,over the next few months, possibly through another offering.

The company, launched 19 years ago on the East Coast, moved to Orange County and went public in what Chatterjee calls a “minuscule” offering in 1996.

Over the past six months or so, the company has pieced together the beginning of what it plans to turn into a Yahoo-like web portal for homesick expatriates, through a cluster of sites using the “City-on-Net” moniker. The first will be allIndia-on-net (www.allIndia-on-net.com) with affiliated sites geared toward individual cities throughout India, such as delhi-on-net.

The sites will feature news and entertainment from home, as well as e-commerce outlets. Speaking from personal experience, Chatterjee said many students and workers from India miss music and food from their homeland and are looking for merchants who understand their psychology and culture.

The concept will expand to an Asia/Pacific-centered cluster of web sites (www.allAsia-on-net.com) later this year. Both sites are operational now, but according to REI CFO Wayne Blair, the company doesn’t plan to launch either one formally until it raises more money.

Gaining Ground

But so far, about 2.5 million people have visited the allIndia-on-net site, about the same number attracted by China.com, which has not yet made a profit but enjoyed a highly successful public offering last year.

Initial steps in building the OC e-commerce venture included last year’s acquisition of R-Cube Technologies and Net Guru Inc., two information technology services companies Chatterjee said will provide the technical expertise needed for the transition. In December, it acquired E-Destinations Inc., a nine-year-old California online travel agency targeting fliers to India and East Asia.

According to Chatterjee, the more than 115 million expatriate Asians live outside their native lands. Indian and Asia/Pacific expatriates spend an estimated $15 billion on travel to and from their native countries per year. They also make $12 billion per year in phone calls to their home countries, $10 billion in money transfers and $20 billion in purchases of ethnic-related items like clothing and specialty foods.

Unlike their American counterparts, Chatterjee says, Indian and Asian consumers tend to need more personalized service. And once they’ve found a service that meets their needs, they’re less likely to jump to another company for bargains, he adds.

But REI will likely face a bevy of competitors. Yahoo already has an Asian-centered version of its popular directory and news site, and dozens of niche ethnic sites, such as China.com, are going after similar targets.

And even Chatterjee admits that it’s a big leap from specialized engineering software to a broader-appeal media hub.

“It is a challenge,” he says. “But creating a portal isn’t too far removed from making software. You have to give them the goodies when it comes to a graphical interface and user-friendliness.”

And he’s confident that his development team, many of them Indians and Asians, are familiar enough with their audience to meet its needs. He adds that the recovery of Asian economies bodes equally well for his venture.

With an existing business infrastructure of 30-or-so technically savvy employees already in India, he says, he has a good chance of realizing his goal of becoming a major player in the worldwide portal market.

“The timing is great,” he says. “A year ago, this might not have worked.” n

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