Viadeo secures $5m more funding, but it still needs a breakout strategy

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Viadeo, a LinkedIn and Xing competitor, has secured $5m of funding from French investment houses AGF, Ventech and other investors (including the wealthy Mulliez family) to accelerate growth and prep for potential acquisitions. The business social network is best known in France, but it’s planning to expand its existing foothold in emerging markets like China, India and Mexico. The latest investment takes the total money it has raised since 2006 to $23m. AGF and Ventech were previous investors. Although this market is seeing a lot of “down round” investments right now (a down round is where investors purchase stock from a company at a lower valuation than previously) I am assured by Viadeo that this is not the case here.

Viadeo is also introducing a new partnership strategy with content providers to feed into the site. They’ve signed a global deal with Microsoft to appear on the Live platform enabling Viadeo members to access their Viadeo network news feed directly from the Microsoft platform. The API they had to build to make this happen will also be used to stream in content from “credible partners” – although personally I’d prefer to be able to plug in my own RSS or Twitter feeds maybe. Perhaps this is coming, since Viadeo was a launch partner with OpenSocial but it has dragged it’s feet till now. They say a full suite of apps will go live in the Autumn. The OpenSocial applications on the runway include Google apps like Google Docs, Flickr, Youtube and a number of others. The ability to Tweet from within Viadeo and an iPhone app are also, apparently, on the way. In other words, they’re clearly pretty busy.

Admittedly, the “French LinkedIn” tag may be a tad unfair – Viadeo now claims 70% of its members are outside of France. So let’s look at the numbers. Video says it has 8.5m members. The last figure reported for Xing, which is now a floated company in Germany, was 7.5 million members, with its base membership coming out of Germany. Xing has admitted losing out to LinkedIn in the USA and China. Both are dwarfed of course by LinkedIn, where half of its 42 million members are outside the US, and let’s not forget it’s $1 billion valuation (Xing’s market cap at the Frankfurt Stock Exchange is in the $220 million range).

Back in Viadeo’s world, they’ve given the site a long-awaited face-lift which has left it looking more Facebook-like, with a much improved interface not dissimilar to LinkedIn or Xing, but certainly more navigable.

But it’s quite hard to say if Viadeo can really do something different enough in the business networking space to give it an edge on it’s competitors. Personally my biggest network is on Linked in, followed by Xing. I can add contacts into Viadeo from Webmail, Outlook, an Addressbook file or (gulp) manually, but I can’t pull them in from, say, Facebook or Twitter. One could of course download LinkedIn contacts as a VCF file. The question is, would anyone join you on Viadeo?

One of the few areas that remains for them to grab hold of is vanity URLs. Facebook has seen a huge boom in these. LinkedIn has had them for years. Xing sort of has them though Xing.com/profile/Name hardly counts. Furthermore in trying to replicate LinkedIn’s business model – premium members can do more than free members – they simply set themselves up for a fall against a bigger player. Surely it would be better to disrupt the larger competitor’s model somehow? Still it’s a much improved effort from Viadeo, and I’ll certainly be using it to build my network in France.

  • Richard Francis

    Hi!

    I’d like to point out that Viadeo do have vanity URLs. They are in the form of: http://viadeo.com/en/profile/name

    Rich

    • Bruno

      I think that’s too long to be considered a vanity URL.
      viadeo.com/name -that would be better.

      • http://bit.ly/4lvSkP Dawn Marie

        Yes I agree. Vanity URLs should be short and easy to remember.

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    […] has raised $5 Million in its current round of funding. The funding came from investors in France namely; AGF, […]

  • AL

    I’m French, doing business both in France and the US, and I cal tell you Viadeo is just a joke – even in France.

    All people in my entourage are on LinkedIn only. They sometimes have a profile on Viadeo (last time I checked it was almost impossible to delete you Viadeo profile…), but never use it.

    Viadeo claims to have 8.5m users, even if this number is correct, I wonder how many are active.

  • http://identi.ca/notice/6555599 Isabelle Ayel (nanouk) 's status on Thursday, 16-Jul-09 18:52:44 UTC - Identi.ca
  • K. Burley

    Yeah… they’re full of shizz. 8 million users? Yeah, right. Some investor(s) just got hosed. Or, more than likely they didn’t really invest and this is just hype to try and turn their original investment into something.

  • http://fraaargh.wordpress.com Francois MAROT

    I’ve started recently looking for a job in the Paris area. I had been a Linkedin user from a long time and was thinking that it was the most widely used and the uncontested leader (working in IT where english is THE language helps)… How wrong was I ! Most of the contact I had recently for job interviews were on Viadeo and not on Linkedin (some were on both). So in France, despite what I thought, I think Viadeo has the lead.
    Just for the record, right now my Viadeo profile says something like “go to see my Linkedin profile” ;)

  • Lucas

    8.5 million members? I don’t think so. Maybe about 8 million inactive ones. Which leaves about half a million French people who are not interested in connecting to people outside of France. No offense to France, but why would anyone join a network full of insular French businessman, unless you are one?

    • AL

      +1

  • Joel

    Being french and not living in france, I have to say that viadeo itself is not terribly attractive. there is no point for me in registering to a french website while most of my connections are worlwide and thus linkedin is king.

    I question the funding as well, $23M is a large sum of cash in total and unless you have a stack of ‘executives’ and ‘managers’ living the great life… where is the money going ?

    it is not like operational expenses should be large, it’s not a video website with need for large storage and bandwith or other things.

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