Viadeo Is Acting Local, Thinking Global

According to an eMarketer report published earlier last year, the number of social network users globally was projected to grow 19.2% over the year to 1.43 billion in 2012. Growth in social network use is estimated to be driven by the increasing adoption of Facebook worldwide. But besides personal use, social media is also gaining popularity in professional networks. LinkedIn remains synonymous with professional social networks. Another lesser known professional network, Viadeo, has also built a strong base.

Viadeo’s Offerings

Viadeo was founded in 2004 in France by Dan Serfaty and Thierry Lunati. Like other social networks, Viadeo was born to leverage the Internet and to connect professionals locally and globally. The company launched in France, but soon expanded globally and is now the world’s second largest professional network, after LinkedIn.

Today, the Viadeo group operates three key brands: Viadeo, ApnaCircle.com, and Tianji. Combined, the three have operations in 12 countries, with a user base of more than 50 million members spread across 226 countries. Viadeo aims to reach 100 million members by the end of the current year.

Viadeo’s apps and portals are available in seven languages, including English, French, Spanish, Italian, Portuguese, Russian, German, and Chinese. Over the past few years, Viadeo has expanded internationally, especially in the growing markets of India and China. In India, their operations are bundled under the ApnaCircle.com brand, which they acquired from ApnaCircle’s founders in 2007. They also established a presence in China through the acquisition of the Tianji brand in 2007. They are now the leading professional social network in China, with more than 14 million members. They are also the leading network in France, with more than 7 million members, and the leading network in West and North Africa.

Viadeo’s success in markets like China and India lies in their ability to adapt their portals to the needs of locals. For instance, in India, ApnaCircle’s site also offers a link to astrological predictions as regional and small local businesses do tend to look up their horoscopes. Personally, I have a hard time relating to this being  a reason to join a professional network, but I suppose their data shows something I do not intuitively see. Their success in China and several other European markets is attributed to their presence in each country’s own language.

Viadeo’s Financials

Viadeo earns revenues through subscription services, advertising, and recruitment services. For subscribers, Viadeo offers not only a free subscription service, but also a premium one which comes with features such as unlimited search capacity, ability for businesses to view unlimited profiles, and the ability for subscribers to see who viewed their profiles. Users can choose a subscription for a period of three, twelve or twenty-four months. The three-month subscription is priced at $13.95 per month.

Details of their financials are not available, but according to estimates they are already profitable and were on track to report revenues of over $65 million by 2011. Viadeo, very rightly, believed in the need to monetize their traffic. Half of their revenues are said to be derived from subscriptions, and the remaining comes in equally from recruiting services and advertising.

Viadeo has been toying with the idea of an IPO for a while. The market was expecting one in 2011, but the company decided to defer their plans.  Analysts are still hopeful that they will be eying an IPO soon. Meanwhile, they have raised $50.2 million in venture funding from investors that include IDInvest Partners, Ventech, Venture Technologies, French Sovereign Wealth Fund, and Fonds Stratégique d’Investissement. Their latest round of funding took place in April 2012 and helped them raise $32 million. They plan to use these funds to continue growth in China, India, and Latin America.

Viadeo’s Acquisitions

As part of their growth path, last month Viadeo announced the acquisition of French start-up Pealk for an undisclosed sum. Pealk is best known for their talent hunting app. The app lets HR teams sort and track recruits from LinkedIn profiles. But Pealk had gotten into trouble with LinkedIn when LinkedIn pulled the plug on Pealk’s API access in 2012 citing concerns about access and violations of the API terms of use. Since then, Pealk has not been in the use. Through the acquisition, Pealk’s app will be modified to work with Viadeo’s database and the two companies can work together to expand Viadeo’s recruiting services business.

Despite Viadeo’s impressive statistics and performance, they are still a distant runner-up in the market. LinkedIn’s force of more than 187 million users worldwide has translated to a successful business that commands a market capitalization of over $10 billion. Viadeo sure has a long way to go, but by focusing on local needs, they seem to be taking some differentiated strides toward achieving their goal.