France's Skyblog looks to partner, not float

Pierre Bellanger, chief executive and the founder of Skyrock, a popular French youth radio and Skyblog speaks at the Reuters Global Technology, Media and Telecoms Summit in Paris May 14, 2007.

PARIS (Reuters) - Europe's leading blog company Skyblog is in tie-up talks with global media and Internet giants like Google (GOOG.O) to accelerate its growth beyond Europe, putting on ice plans for a flotation later this year.

"The stock market doesn't answer our quest for speed," Skyblog co-founder and chief executive Pierre Bellanger told the Reuters technology, media and telecoms summit in Paris.

Bellanger said on Tuesday that Skyblog was focusing on a major partnership or collaboration that could involve a stake sale rather than a float at a time of bullish stock markets and high valuations for media companies.

Skyblog grew out of the French rap and R&B radio station Skyrock. The business is part of a larger company called Orbus, which is 70 percent owned by Axa Private Equity, an arm of French insurer Axa (AXAF.PA). The rest is held by Bellanger.

He said Skyblog developed its own software, had enough cash and did not need to go to the market even though it was doubling the number of servers that help its sites run to 400 this year.

Part of his confidence stemmed from the fact that although Skyblog grew from a radio station base, new site launches abroad were enjoying strong growth with no broadcasting presence.

In France, Skyblog has grown by focusing on teenagers via Skyrock and the company's free Internet networking service with blogs, profiles, pictures, mail and messaging.

"We are starting like fire everywhere because our software is extremely simple to use. If you compare MySpace and us there are big differences. MySpace is a network of profiles, we are a network of blogs."

MySpace was bought by Rupert Murdoch's News Corp. NWSa.N in 2005 for $580 million. It competes against rivals like Google Inc.'s (GOOG.O) online video-sharing site YouTube and Microsoft's (MSFT.O) popular MSN portal.

Bellanger said a partnership would help the company quickly gain access to international marketing, sales and new markets.

"We are exploring these possibilities knowing that our main idea is to be one of the top world social networks but to do it fast," he said.

Bellanger declined to specifically identify the companies Skyblog was talking to, but said the so-called 'GYM' companies -- Google, Yahoo and Microsoft -- measured up well.

"Any of the three could bring to the table the monetization everywhere from the start," he said. "Imagine a company that has an Internet presence on every major market and that may from the start help us to sell our huge stock of pages."

Bellanger said he was not fazed by suggestions core Skyblog supporters might not appreciate the business being aligned to a global media and Internet giant given its humble origins.

"I don't think anyone cares truly about corporate ownership .... We have seen it with MySpace for example. People were saying 'Oh la la, Murdoch is going to own MySpace, it is the end of the world as we know it,' No, nothing happened, so I think that corporate ownership doesn't matter."

He added: "What is extremely important in the partnership we are going to do is that we are going to preserve the independence of the brand."

Bellanger was among the first to move into blogging in France when he launched Skyblog in 2002. Skyrock was founded in 1985.

With 8.5 million active blogs, Skyblog draws the biggest audience of all blog platforms in both Europe and France and generates revenue from advertising.

Bellanger said Skyblog was growing 5-10 percent each month and that half of its audience was outside France, notably in Belgium, Switzerland, Canada, North Africa and Senegal.

Domestic language sites in the UK, Spain, the Netherlands and Germany were released in the past month.

Bellanger said the French networking site was generating 1.2 million new posts every day and had 16 million unique visitors in March, which according to industry data made it the 151st biggest site in the world. The company's 5.2 billion page views made it the world's 21st biggest Web site, he said.

Skyrock was the first national radio in France for teenagers and has 4 million listeners daily with two-thirds under 25.

"When we started on the Internet we did it to broadcast. What we have learned is that the Internet can do broadcasting but it's best usage is to develop conversation. We were going from an age of broadcasting to conversation," the CEO said.

"The new asset is the collective intelligence of the listeners, viewers and readers. It is a truly fantastic source of knowledge, value and development," he said, adding that the Web had helped turn an audience into a media of its own.