With the debt crisis and fluctuating financial landscape in Europe, leaders have been making it a priority to support homegrown technology companies as a means to spur the economy in a sustainable way. Governments usually offer this support through subsidies, tax breaks, and financial incentives; however, in France the government is establishing more direct involvement.
The French's sovereign wealth fund set up by Sarkozy's government several years ago, the Fonds Stratégique d'Investissement, has invested €2.5 billion in successful French technology firms like Groupe Belle, Dailymotion, and Skyrock. According to a recent New York Times article, this effort is three-fold, to spur viable economic growth as mentioned above, to support French companies' expansion and success, and to keep these companies in French hands.
The recent investment from this fund in Viadeo, the reported second largest professional social networking site in the world (behind LinkedIn), is the latest example of this activity. The fund invested €24 million in Viadeo which is the largest investment made in any European social networking site to date. The site has 45 million members and although it is only 1/3 of the size of LinkedIn, and according to The New York Times, Viadeo contends it is the most popular in France and China, a market that has 10 million members. But with this influx of new money, the company plans to expand into international markets. The platform already has a foothold in India and Africa, and it is clear they have plans for more territory.
Given the track record of financing by the French government fund, more will follow for promising French tech firms, especially those in the social media space. This alone won't spur France into a leading position in social media, however, it will provide valuable support to companies that prove their worth and may be the difference for them individually in making the international jump that Viadeo plans to currently take.
Businesses in the French market, SEO companies, and marketing firms alike, especially those engaged in international SEO, should be tracking the success of Viadeo not because of its direct marketing potential (being a professional networking site) but because of the path it could blaze for future French tech companies. Such new companies may make more possible for these firms engaging in ISEO in their markets. This long-term strategy to invest in homegrown talent is an overt statement by the French sovereign fund that may indeed pay off in the short-term.