How does one arrive at Rediff.com's (NASDAQ:REDF) ticker symbol? You take the IF out of REDDIF.

Unfortunately, there are a whole lot of "IFs" in consuming this morning's report out of the Mumbai-based website provider:

  • If Rediff's market share is growing in India why are earnings falling?
  • If India is a booming market, why is Rediff reporting earnings down to the hundredths of a penny?
  • If Rediff was proud of its results, why did it bury the actual profitability several paragraphs deep?

Rediff's quarterly revenue grew by 22% to $8.3 million during the quarter, with a 42% gain in its India Online sites held back by a 19% dip in its fading stateside publications for homesick India immigrants.

Earnings fell to $0.03 per ADS, or exactly $0.0262 according to Rediff's income statement. The results fell well shy of the lone analyst still following the company, who was expecting a profit of $0.06 a share on $9.4 million in revenue.

Rediff is trying. It's been beefing up its site to make it more useful, including things like offering up enhanced bus schedules and posting high school exam results. The real question is if Rediff will ever be able to earn enough to justify a share price valuation beyond the single digits. The market was certainly enamored by Rediff's potential a couple of years ago. Shares peaked at $33.75 two years ago. Unfortunately, reality has been a crusher.

India is a tech-savvy country with 1.2 billion residents. The Internet is naturally a big part of that, though Rediff and access provider Sify (NASDAQ:SIFY) are trading in the single digits.

Rediff lacks the chunky margins that investors are getting out of online portal specialists like SINA (NASDAQ:SINA) and NetEase.com (NASDAQ:NTES) in China. Rediff's miniscule revenue generating power is starting to make it look like India's version of Answers.com (NASDAQ:ANSW), a Web company with a great story to tell until the market realizes that the chapters are too short to follow.

There are certainly plenty of quality companies overseas. We wouldn't have an entire newsletter devoted to smoking out superior international stocks if there weren't. Rediff is nowhere near making the cut. Rediff's online growth is respectable, but only if it is able to ramp up revenue with fat margins to match. If not, that will be just one more "if" in a long line of unanswered questions.

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Longtime Fool contributor Rick Munarriz relishes unearthing promising growth stocks overseas. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.