Pierre Chappaz is not well known in the United States. The activities of this French (now living in Switzerland) entrepreneur are mostly known in Europe. He’s the founder of Kelkoo, one of the oldest search engines for shopping, and he helped the RSS aggregator Netvibes grow up. Last week, Pierre Chappaz killed his last project, Wikio and Wikio Experts, a news aggregator and a content farm built on the model of Demand Media. Wikio is a Google Pandavictim, as Google’s new algorithm was conceived to kick out content farms and news aggregators from search results. After Panda’s arrival, most content farms tried to adapt, some trying to cheat around Google’s new rules. Chappaz didn’t. He’s a pragmatic entrepreneur and, by the way, an adept of Zen meditation. He focuses on what is essential. Less than one month after the release of the new algorithm in Europe, he announced that he was changing his group’s core activity for more sustainable models. At the same time, he raised $25 million and renamed the group eBuzzing, specializing in social video advertising. Here’s why and how he reacted so quickly:
“Killing Wikio was not an easy decision,” Chappaz told me, “because it was my project for six years now…I spent thousands of hours on it. So, yes, it’s hard. But it’s also realistic.” However, the move was widely anticipated eighteen months ago, with the links established between Wikio and the young startup eBuzzing. “That’s why I wrote in April that I wasn’t afraid of Google. Its attitude is not new,” he said.
“Google Panda is the result of many years of struggle, with Google trying to eliminate go-between services like news aggregators and specialized search engines,” explains Chappaz. “Why? Because Google’s revenues for the broad search platform are slowing down. Google needs to eat in its own ecosystem to keep its revenues flowing. So running a B to C news aggregator is just impossible these days, because most of your traffic is coming from Google. I realized that 2 years ago. That’s why I merged Wikio with e-Buzzing.”
Nevertheless, Pierre Chappaz decided last year to run a new project: Wikio Experts, a content farm website, where you pay bloggers a low rate to produce “Google-friendly” content. At that time content farm sustainability was very controversial. “I made a mistake,” Chappaz agrees. “But I don’t regret it. I think that some of the ideas that sustain the content farms model are still good.” According to Chappaz, the idea of trying to match your content to what people are looking for (in search engines or social media) can really help media companies improve their traffic and revenues. “But we undoubtedly made a mistake by launching this content farm project.” Mostly because the quality was not there. “The Revshare model is a better model than having a fixed rate to improve the quality of content. We didn’t make that choice. It was a mistake. Most of all: managing and editing content was not in our ADN. We’re not a media company.”
Wikio’s ADN was more technological: building social and semantic algorithms to track influence and virality on social medias. “I realized that the real business for indexation is not B to C but B to B. That’s why we’ve integrated all our algorithms in the e-Buzzing technology, so we can help brands improve their viral campaigns on social medias.
In 2010, Wikio’s revenues made up less than 10% of the total revenues of Wikio group. 50% was made by e-Buzzing, which builds links between brands and social medias through leaders like bloggers, Twitter or Facebook users. e-Buzzing has a network of 60 million unique visitors in Europe (UK, France, Spain, Germany and Italy). It sells viral video campaigns in social medias, and uses Wikio’s semantic algorithms to track data, but also uses conversations around the campaign and the brand.
Chappaz thinks that e-Buzzing’s revenues will double in 2011.
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