Stakes are huge as the US-based social network goes public. But the effects of the estimated $100 billion Facebook IPO will ripple beyond Palo Alto and Wall Street, as tech “ecosystems” across the world bank on the network's reach. Here’s how FB
PARIS - As the American technology and business sectors gear up for the impending Facebook IPO, the rest of the world is also bracing for the effects of this critical turning point for social network behemoth.
France, which has a vibrant digital startup scene, includes an increasing number of gaming and advertising companies that have jumped on the social network's bandwagon. In 2012, it is estimated that Facebook could rake in nearly 220 million euros in sales in France, and young entrepreneurs are lining up to position themselves on a juicy if still risky market.
Facebook imposes a 30% fee on sales generated on its platform for games and applications, while the social network also lets companies do their own advertising for a revenue split. Partner companies could directly generate 500 million euros on this market. But betting on Facebook is still hardly a sure thing.
"You have to be agile, to know how to adapt quickly, because Facebook constantly modifies its platform," explains Charles Letourneur, associate director at Alven Capital, which has invested in several companies with focused Facebook strategies, including Antvoice and MakeMeReach. Letourneur also cautioned that startups should always aim to diversify their sources of revenue to better ensure long-term success.
Deezer and Dailymotion
Gaming is the most lucrative Facebook-related market for France, which is the ninth-ranked country for Facebook users with more than 24 million people. And though France has long been known for its dynamic video game industry, no European company has reached the size of American giant Zynga.
Some have been able to position themselves in niche markets: Adictiz, a small start-up from the northern city of Lille, shot to fame with "Paf le Chien", a man-kicks-dog game that attracted 15 million players worldwide.
"With markets like Russia, Asia or Latin America, we can still multiply our number of players by 12 or 13-fold by 2015," says Charles Christory, co-founder and executive officer at Adictiz. Compared to Zynga or German company Wooga, French video gamemakers' earnings are still modest. But isCool Entertainemnt, to name one, generated 9.1 million euros in sales for 2010.
French advertisers face harder challenges on Facebook, which tightened access to the market with an accreditation system that favored American companies early on. But in light of what Facebook founder and C.E.O Mark Zuckerberg calls the "socialization" of the economy, industries across the board are vying for untapped markets on the social network. "Social apps' enable users to see real-time updates on what their friends are reading, watching or listening to. French companies like music stream startup Deezer and Dailymotion video platform were the first to experiment, while established media company Canal+ allegedly racks up a quarter of its Internet traffic from Facebook.
Read the original article in French by Nicolas Rauline.
Photo - Goiaba
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