Harsha Man Maharjan
Mercantile Communications as Innovator
Mercantile Communications was the main innovator of online journalism in Nepal. It mainly operated three websites - http://www.cen.uiuc.edu/~rshresth/ktmpost/newshome.html (1995-1996), www.south-asia.com (1996-1998), and www.nepalnews.com (1999-2015) - made possible by the capabilities of digital technology and the participation of actors in the IT and newspaper industries. From 1995 to the early 2000s, the ISP grew from having a few subscribers to making the Internet commercially available; Mercantile became popular through www.nepalnews.com as a window into Nepal for Nepalis and others who wanted to know about Nepal.
In the first phase, Mercantile Communications partnered with a newspaper, The Kathmandu Post, and made its content available online on September 1, 1995, although the IT company did not have its own domain name and server. It used the home page (http://www.cen.uiuc.edu/~rshresth/ktmpost/newshome.html) of a Nepalese student, Rajendra Shrestha, on the server of the University of Illinois. Sanjib Rajbhandari, CEO of MC, realized that there was a demand for such a product when he noticed that participants of The Nepal Digest (TND), an Internet magazine started in the US in 1992, and the newsgroup soc.culture.nepal had access to old news. He convinced the management of Kantipur Publications to enter into this partnership.
One of the problems that led Rajbhandari to move to another site in 1996 was poor connectivity. Since the first site was hosted on the university's server, users from other locations complained about the accessibility issues, and the second site, www.south-asia.com, was created. Mercantile was then able to place the content or links from the newspapers on its home page. By June 1997, newspapers such as The Kathmandu Post, The Rising Nepal, The Independent (weekly), the monthly Himal, and Radio Nepal were available in the publications section.
ince the service was poor and the site looked like it was focused on South Asia, it was decided that there should be a home page dedicated to Nepal. This was important for two reasons. One was the poor quality of the server. The second was the demand for more news. By this time, the CEO of Mercantile Communications had realized that news attracted more traffic than other content and that the right course of action was to have a site based on news. The third website, www.nepalnews.com, became fully operational in October-November 1999 and included content from both English and Nepali newspapers. Mercantile also contracted with other newspapers for content. By March 2000, the site contained content from four dailies: Kantipur, The Kathmandu Post, Gorkhapatra, and The Rising Nepal, as well as seven weeklies and eight monthlies. By August 17, 2000, Nepali Times (weekly), Sandhya Times (Nepalbhasha daily), and Kamana Prakashan publications such as Nepal Samacharpatra, Mahanagar, Sadhana, and Kamana were available on Nepalnews.com.
Gradually, Nepalnews.com became a portal that provided links to various content from different newspapers and had sections such as flash news, photo galleries and audio content. By 2000, it also offered other services such as the Nepalnews search engine and chat room. We can see that it gradually became a portal like America Online, Yahoo! and Netscape. At that time, it also formed a team of two journalists, Yuba Nath Lamsal and Ram Prasad Humagai. Both journalists were from Gorkhapatra Corporation (GC) and worked part-time for Nepalnews.com.
The IT company gradually moved into the news business. To attract more newspapers, MC started to pay for the news content and had exclusive rights to it by 1998 February. This shows the importance of newspaper content to MC.
But why did Rajbhandari pay? One reason he paid for the content was that he had planned to charge users a dollar a month, but he could not realize this plan. Even a U.S. newspaper, the New York Times, put up a paywall around 1996 and charged readers outside the U.S. $35 a month. Perhaps because of this, even Rajbhandari considered a similar approach. But in Nepal's case, there was a problem: there was no payment gateway for such transactions at the time. There was no way to collect money from a subscriber in Nepal, nor was there a law governing such transactions, as the law governing electronic transactions in Nepal was only enacted as an ordinance in 2004 and as an Act in 2006. Rajbhandari claimed that Mercantile's effort to keep the newspaper and news on the Internet was a branding initiative and that he knew it was a money-losing venture.
However, the case of India shows that it has not been easy to charge users for news. The website www.Indiaworld.co.in was launched on March 13, 1995, by Ravi Database Consultants Pvt Ltd, which put the content of some Indian newspapers, such as Indian Express and Times of India, on its website. At that time, these two newspaper publishers did not have their own websites. The Ravi database also seems to have inspired some Indian newspapers to put their content on the web, as did Mercantile Communications in Nepal. It is interesting to note that this organization targeted this site to non-resident Indians, like Mercantile Communications, and charged for its content until November 1996. Initially, the rate was US$ 49 per month, then it was reduced to US$29, then US$20 for a year, and then all fees were dropped in November 1996.
So, one of Mercantile Communications’ interests was to promote its name. MC was a new organization and had just started its Internet business when it put the content of newspapers online, which was the mechanism to promote its name to people with access to the Internet. In 1995, according to the World Bank, only 0.001% of the population in Nepal had access to the Internet. Thus, very few people were using the Internet in Nepal at that time and the speed of the Internet was very slow.
Mercantile could not create such content, and if it had wanted to, it would have needed a real news team of journalists from the start. Such a partnership was important to Mercantile because it helped the company get its name out there. Without www.south-asia.com, it would have been difficult to showcase MC's work, and the site would have been less popular without news from newspapers. A similar concern was expressed by Steve Case, owner of America Online. He felt that content from leading brands allowed for a broader “mainstream appeal”. AOL offered its services primarily to subscribers. In MC's case, however, it was free to all. Some major newspapers were suspicious of MC's activities and gradually launched their own websites.
Newspapers: Partners to Clients
Nepali newspapers were willing to participate in the digital transition because it allowed them to promote their brand. This manifested itself differently for each newspaper. The Kathmandu Post (TKP) made the transition to promote the paper's name to people who had access to the Internet and were interested in news from Nepal.
It is interesting to note that TKP mentioned this move as the first in Asia in its newspapers. TKP's branding as the first in Asia to go digital started with news stories and expanded to editorials, advertisements, and letters to the editor. The news story published in TKP was titled “The Kathmandu Post available in cyberspace” and read, “The Kathmandu Post, a national English-language daily from Nepal, has become the first Asian newspaper to be available for free in cyberspace”. However, the TKP's claim that it was the first newspaper in Asia to be presented online was factually incorrect, as newspapers from Japan and India were available earlier. Two Japanese newspapers, Yomiuri Shimbunin and Asahi Shimbun, were available online in 1995: the former went online in June 1995 and the latter in August 1995. The Hindu began posting its weekly edition in June 1995, and the daily service was launched on October 1, 1995.
Branding was also a goal of the Gorkhapatra Corporation's government-owned newspaper, The Rising Nepal (TRN), which became available on www.south-asia.com/news-trn.htm on a trial basis on February 23, 1997. On April 4, TRN published a short news item informing readers that its content had become regularly available on the Internet and providing information about the link. The reason mentioned in its official document is to make TRN available to readers around the world. So, branding was the only goal of the collaboration, as shown by the contracts I was able to obtain.
But branding was not the primary motivation for many Nepalese newspapers. Mercantile Communications used a variety of strategies to convince newspaper publishers to make their content available on the Web. Because there was no compelling reason to offer Nepali newspapers on the Web, MC found it difficult to convince these newspapers. It provided Kantipur Publications with free e-mail and even a scanner to help them scan print news and upload it to the Web. In the beginning it was not easy to convince the first two or three newspapers for a partnership, but after that it was not so difficult. Later, the time came when several newspapers approached Mercantile about putting their content on the web, even offering to pay for the service instead of MC.
The fact that many partnerships were financed by barter rather than cash exchange, since newspapers often had to offer advertising space to Mercantile in exchange for the service, allows us to argue that online newspaper advertising was more profitable for this organization than print newspaper advertising. The contract between MC and GC, signed on March 31, 1998, stipulated that the cost of putting TRN's content on the Internet would be paid entirely by barter. This contract, which must have been in place before the advent of www.nepalnews.com, reveals an interesting fact: It seems that after MC launched its own web site, it began charging newspapers like TRN for the initial installation of the website in March 1997 and for putting the content online each month thereafter.
Before Nepalnews.com, contracts with newspapers were perhaps vague and only became professional after the launch of the website. Mercantile Communications' transition to more professional contract terms meant that MC had to start paying in cash. I have not been able to trace the first contract between Gorkhapatra Corporation and MC, but the contract signed by the two parties on September 20, 1999, shows that MC agreed to pay NRs 2,00,000 annually in four installments with an annual increase of 10% for the content of two daily, one weekly and four monthly print media of GC. MC would also provide unlimited email service, host GC's website and provide feedback on the website free of cost. Because MC was paying this amount, GC had to provide "all published content (text, photos, and graphics such as cartoons, drawings/diagrams, and graphs/charts)...in digital format...on a disk or by email." Although the amounts may vary, it is safe to assume that these were the formal requirements for all publishers.
MC created a business model like the bundle or partnership model of revenue sharing that these newspapers arranged with commercial online service providers. In the United States, prior to the Internet, service providers provided online access to newspaper content only to their subscribers, in addition to the regular fee those subscribers had to pay to access the newspaper content. Service providers also shared revenue with newspapers. U.S. newspapers have experimented with different types of partnerships, including partnerships with ISPs, commercial online service providers and even other newspapers. However, the Nepali model is different because it was the MC that paid for the content on the Web.
Although the 1998 contract with GC mentioned that Mercantile Communications would host the corporation's website, what MC did in practice was to make the newspaper's website a subdomain of its website, www.south-asia.com. A possible reason for this practice is that it would have required extra money to provide a domain for each newspaper. Eventually, the newspapers realized that the Nepalnews brand was gradually overshadowing their own brands. This was one of the reasons for starting their own websites. The editor of Kamana Prakashan revealed that the newspaper went online with Mercantile for branding purposes, but he soon realized that he needed his own website for that. Many people thought that Mercantile Communications must be profiting from this, arguing that they would not pay for the content if they were not making money.
The idea of branding or promoting media names to avoid identity crises is important in the history of online newspapers. Research on online newspapers has mentioned that when newspapers connect with consumers online, it hinders the growth of a distinct newspaper identity and direct contact with online readers. While the Nepali newspapers were providing their content to MC, the scenario in India had changed. The Hindu had its own website by 1995, and the Times of India, Indian Express, and Hindustan Times had their own websites by 1996. All of them operated their online editions as separate entities from their print newspapers. Hindustan Times and The Economic Times also planned to have separate editors for their online editions by 1997.
Different Pathways
In 2000, the first newspaper publisher, Kantipur Publications, which had collaborated with MC in 1995, decided to set up its own website. This was just the beginning, as in 2002 Gorkhapatra Corporation decided to follow suit, and in 2003 Kamana Prakashan did the same. This marked the end of MC's association with these three large newspaper organizations.
Harsha Man Maharjan is an Adjunct Lecturer and Global Postdoctoral Scholar at Northwestern University in Qatar. This piece is a revised excerpt from the article "No crisis but cooperation: Construction of online newspapers in Nepal” without images, published in the book Histories of Digital Journalism: The Interplay of Technology, Society and Culture (2025).
