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The number of Internet users in India has gone up to 38.5 million, from 25 million in 2004-05, a growth rate of 54 per cent, according to the Internet & Mobile Association of India. The organization is also projecting the number of Internet users in India to cross the 100 million mark by 2007-08. So in the next couple of years the user base will more than double. Yet even after reaching the 100 million mark, only 10% of the population of India will be online.

The time to take advantage of this growth is now. This provides an opportunity in the Internet sector in India. SIFY and REDF will both benefit from this growth, and so will GOOGLE, YAHOO, INDIATIMES, MSN and EBAY.

I personally like SIFY the most. SIFY is a diversified company and its various business units will all benefit from this continuing growth. The growth continue, providing opportunity to investors.REDF is another company positioned to take advantage of this growth. Unlike SIFY, REDF is mostly a pure play portal, but I think it's overvalued right now.

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Source: 54% Growth Rate in Indian Internet Users (REDF, SIFY)