Last week Orange confirmed that it has entered into exclusive negotiation with Dailymotion – the French UGC Video portal and YouTube competitor – with a view to acquiring a 49% stake in its capital for 59 million Euros. Beginning in 2013, the project allows Orange a progressive capital increase to 100% and also allows for the integration of new business partners. The signature of the final agreement should be reached in the coming months that will enable both parties to optimize their video services and enrich their respective offers.

Commenting on the deal, CEO of France Telecom-Orange Stéphane Richard said that “Our role is to support our customers in this digital revolution - we would like to bring them into the 'Cloud Video’ world where Dailymotion is a major player.” 

Thus we thought it might be interesting to take a closer look at Dailymotion users from our recent Digital Media survey and here are some of the results: 

As the graph above shows, Dailymotion primarily attracts French Internet users but some traction exists in other major region as well. The deal with orange will likely help Daiylymotion build international presence by leveraging Orange’s large international footprint.

When comparing Dailymotion users to YouTube users, it becomes clear that Dailymotion I more skewed towards younger age groups. A seen in the graph below, the majority (62%) of Dailymotion users are under 35 years old while the majority (52%) of YouTube users are actually 35 years or older. 

Thus, Dailymotion may be able to help Orange attract younger age groups by its brand affiliation. Perhaps more interesting though is that Stéphane Richard’s comment about “Cloud Video” and the strategic implication for Orange. With the acquisition of Dailymotion, Orange will join Telefonica as two of the few major telecom operators in the world that operates standalone over-the-top video portals (Telefonica owns and operates Terra TV in Latin America and Europe). As OTT video becomes an increasing part of how consumers access video content, more moves into cloud video by major telecom operators is to be expected.

Martin

Last week, the professional social network service LinkedIn filed for its IPO, expecting to raise $175 million from the capital market. The company's stock could be traded publicly any time soon as we speak. LinkedIn's IPO, alongside with Facebook's shares being actively traded in the private market and other social media firms' soon to be expected IPOs, indicates the long-time nascent social media market is approaching a watershed moment that social media business finally becomes finacially viable and profitable. 

The Internet world has marched through 3 phases so far, from the era of web portals, where AOL and Yahoo-like websites served as the main gate of Internet, to the emergence of search engines and now to the age of social media. The IPO of Google in 2004 carved a sign of maturity on the search business in a sense that search could be an independent and financially viable business. The same doubt was placed on social media companies as well in the early stage of the business when sites like Facebook and Twitter generate a tremendous number of pageviews and gain millions of users with incommensurate level of revenues. Advertising is always a key revenue stream for Internet business, but the small amount of ad revenue on social networking sites compared with their large user bases forces these companies to look for other income streams. 

LinkedIn has figured it out. The professional network has seen almost 100% revenue growth in 2010, providing a strong evidence to our social networking market growth forecast published last year. Among the three major revenue streams LinkedIn has, advertising or marketing solutions by their terms accounts for 32% of total revenues in 2010. They generated 27% of their sales from subscription service, and the biggest portion 41% came from hiring solutions, which is primarily derived from the sale of corporate solutions and job products. It is also expected that LinkedIn's future growth heavily relies on the hiring solution segment. If we project a 20% annual growth for the company, we would see it become a $500 million company in 2015. The kid of social media finally matures. 

I'd also like to share some stats on US social media users.

Client Reading: Social Network Market Forecast, Profiling the US Social Network Users