EuroBusiness Media (EBM): LeGuide.com, one of the leading on-line shopping portals in France, went public just one year ago. Corinne Lejbowicz, welcome. Today you are planning to raise more capital on the market by issuing some new shares. Why do you need more capital today?
Corinne Lejbowicz (CL) : Why do we need capital? Because we started our European activities a little more than three years ago now, so we opened in these countries, and now 15% of our traffic comes from European countries outside France, but we feel we can go even faster. And to go even faster, to open in new countries, to have more revenues from these countries where we already operate from France, there are two ways to do it. With organic growth, which we will continue to do, and by making some acquisitions in Europe, especially if we can find some companies who do the same business we do, but have an important market share or technology or know-how somewhere in Europe. In order to make these acquisitions, we need to have the money to do so -- in the coming months hopefully.
EBM: A year after the IPO - for those who are not yet familiar with your company - what would you say are some of the key points to know about LeGuide.com?
CL: LeGuide.com is an independent French shopping guide. So the next question might be: what is a shopping guide? A shopping guide is an Internet website where online consumers search and find all the information they need before buying, and where e-merchants may show their products and their prices, and give information to the consumers so that the consumer can choose the product which is right for him. To give you some examples, a shopping guide is made up of a shopping search engine which is completely dedicated to shopping, with only shopping products. We also have an e-commerce directory that lists all the e-merchants, and we rate the e-merchants that sell on-line. And we also have some editorial features to help consumers get all the information they need about the merchants and the products. We are a leading shopping company in France. We have something like three million unique visitors per month on our web site in France. And we also operate a shopping guide in twelve European countries now, all based in Paris - we operate all our business from our Paris base. So this is what a shopping guide is, and of course we have been listed now for one year to help us develop our business throughout Europe.
EBM: Would you say that your business model is more of an advertising revenue model, or a transactional model whereby you collect a percentage of on-line sales?
CL: Well, I would like to answer that it is neither of these. It is definitely not a transactional model. We consider ourselves as a media company. And as a media company we don't want to be involved in the business of our clients, the e-merchants. We don't want to get paid on the basis of a commission on transactions. Maybe we would consider one client better than another, and we would potentially lose our independence. So we want to remain a media, and the media has to be independent from its clients. We are not really an advertising model, because the e-merchants don't come on our site just for two weeks or for Christmas or for holidays. They have long term deals with us, they are present and listed on our site all year round for the most part. We have long-term partnerships, and we carry out special operations with them, so it is not really a traditional on-line advertising model. So we work on a business model that is known as a CPC. For those who might not be familiar with the word "CPC", it means cost per click. So we invoice the click, in other words the traffic that we sell to the e-merchants who are listed on our sites.
EBM: Who are your main competitors in Europe, and what is your strategy for international expansion, as competition is becoming increasingly fierce in your space?
CL: Well, it is true to say that competition is fierce. In each country there are some independent players like us - in Germany, Spain, wherever in Europe. And there are also very big competitors - the biggest one in Europe is Yahoo! Shopping. Yahoo! Shopping Kelkoo, this is one of them -- . Kelkoo was a French company a few years ago, before Yahoo! bought them. We also have Shopping.com as a competitor. Shopping.com, an e-bay company, is another big American player. Shopzilla which is a Scripps media company, a major American company also present in the U.K., France and Germany. So we have all these big guys to compete with. This is a real challenge, and we are very proud to have them as our competitors. So what we do is we have developed some methodology to have a real strong organic growth, being based in Paris but knowing how to build European sites quite quickly. We have very little marketing spending, and we are quite efficient: we are able to open up in a country within a few months. So this is the way we work today, but we think that in order to grow even faster we now need to consider certain acquisitions, which we plan to do in the coming months.
EBM: Your industry is currently in the midst of a wave of mergers and consolidation. How does LeGuide.com view its own position in the current environment?
CL: I think there are maybe two questions in your question. First, in our sector, the shopping guide, there has been a lot of consolidations these past three years, first in France with Kelkoo, and very recently in Germany where two shopping guides were both bought by local media. So in our small sector consolidation is going on. We think, we are convinced, that there is room for us to become a leading independent shopping guide in Europe, and to remain independent. Well, on the Internet more generally the newspapers are full of acquisitions and mergers these days, with Google and the others. Of course, everybody sees that advertisement, that cost-per-click CPC models are growing, so everybody is trying to find the right partners. And this will probably continue until everybody has a whole portfolio of offers for their clients.
EBM: Finally, analysts point to the fact that you are very much dependent on Google. Even though Google is the clear market leader, should we be concerned about a risk of overdependence on a single search engine?
CL: I think everybody working on the internet should be concerned about Google growing every day and getting market shares that are completely crazy. But at the same time, it is also good that we have Google to bring us traffic. What we try to do is to balance our traffic between three main sources of traffic, Google and the other search engines like Yahoo! and MSN, which bring us some natural traffic. We also have our own direct traffic, mainly in France where LeGuide.com is well-known, and where consumers come to look at .com to find their information before shopping, and this traffic is growing. And a third source of traffic is our partners. We have developed partnerships with companies like Orange, which in France is roughly half of the market. Alice is another partner which brings us some traffic. So we really have three sources of traffic, and we try to keep and develop this balance between sources of traffic.
EBM: Corinne Lejbowicz, CEO of LeGuide.com, thank you very much
CL: Thank you.
