Netalk

Publicis Groupe Buys Chinese Social Media Firm Netalk As Part Of A 5-Year, $4B Acquisitions Spree

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French advertising conglomerate Publicis Groupe announced today that it has acquired Net@lk, a Chinese social media service provider, as part of its five-year plan to spend $4 billion purchasing small to mid-sized digital firms in emerging markets over the next five years.

Based in Paris, Publicis Groupe is the world’s third largest advertising and public relations company. Its properties include digital agencies DigitasLBi, Razorfish and VivaKi, creative agencies BBH, Leo Burnett and Saatchi & Saatchi, as well as Starcom MediaVest Group and ZenithOptimedia.

Founded in 2007, Net@lk helps companies and brands implement social media strategies. The company, which says it has worked with over 60 Fortune 500 companies and almost 300 brands, including Coca-Cola, Pernod Ricard, Wal-mart and Adidas, currently has 350 employees and six offices in Shanghai, Beijing, Chengdu, Hefei, Xiamen and Nanjing. Net@lk consists of four stand-alone business divisions: Net@lk and Simone, which provide social media services; Lenx, a social content producer; and Buzzreader, which engages in monitoring, research and analytics for most Chinese social media platforms, including Weibo, Renren, Youku, Taobao and WeChat.

Net@lk and Lenx will be combined with DigitasLBi. Simone will be merged with the social media division of Razorfish and Buzzreader will be aligned with VivaKi. Net@lk CEO Lamy Zhang will lead the DigitasLBi Net@lk operation, reporting to Roy Capon, CEO of DigitasLBi APAC.

“We committed to grow our digital marketing capabilities in China on the dual strategic pillars of ecommerce and social media,” Vincent Digonnet, executive chairman of Razorfish and DigitasLBi networks in APAC, said in a statement. “The acquisition of Longtuo in May 2012 enhanced Razorfish’s e-commerce development capability and the acquisition of Net@lk completes our two-pronged strategy making DigitasLBi the leading socially-led digital marketing network in China.”

Publicis Groupe is known for its love of high-profile acquisitions. The company announced in April that it plans to spend $4 billion purchasing small to mid-sized digital firms in emerging markets over the next five years. CEO Maurice Levy told investors that Publicis Groupe aims for 75% of its revenue to come from digital and emerging markets.

Net@lk joins several other Asia digital firms Publicis Groupe has added to its portfolio this year, including Indian technology-service provider Neev, Beijing-based Longtuo, a e-commerce marketing company that is now part of the Razorfish network, and U-Link Business Solutions, a Chinese healthcare communications agency.

Though Publicis Groupe did not disclose the financial terms of its deal with Net@lk, the company has been willing to spend generously as it builds out its business. For example, Publicis Groupe spent $1.3 billion in cash on interactive and direct marketing firm Digitas in 2006, while more recent acquisitions have been around the $400 million to $500 million mark, including LBi for $450 million and Rokkan for $575 million in 2012.