Higher operating expenses caused Rediff’s profits to fall by 40% in its second quarter to $890,000 (3.04 cents per ADS) compared to $1.5 million (5.14 cents per ADS) in the year earlier period.

Revenues rose 18% to $7.8 million from $6.6 million in the year-ago period.

Operating expenses increased by 29% to $5.39 million compared to US$4.19 million for the same quarter last year reflecting higher product development and general and administrative costs.