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François Hollande’s message of the week was that he likes entrepreneurs, wants to foster an investment-friendly climate in France, and is keen on dissipating the “misunderstanding” with the business world that marked his first year in office. The French President should have told his ministers. One of them opposed the Yahoo acquisition of Dailymotion, aka “the French YouTube,” on grounds that one of France’s few Internet success stories shouldn’t fall into foreign hands.
It’s the story of Mr. Hollande’s economic policy in a nutshell: one step forwards, two steps back. The Dailymotion deal was entirely friendly, agreed both by the company’s founders, who remain at the helm, and France Telecom, its reluctant shareholder. The latter acquired its stake in two stages – 49 per cent in 2011 from, ironically enough, a government-controlled investment fund, and the rest earlier this year. The purchase was done on the understanding that France Telecom would quickly help Dailymotion find new shareholders more in tune with its Web culture.
Paris didn’t have legal means to oppose the deal – save for voicing its opposition as a 27-per-cent France Telecom shareholder. But it’s been the long practice of French governments to use Sicilian-style methods to deter foreign buyers of French supposed jewels. A signal of displeasure proved enough, eight years ago, to dissuade Pepsi from launching a bid on domestic food champion Danone. At the time, there was at least the weak excuse that the deal was to be hostile.
Dailymotion will now have to turn to the government to find the €50-million ($66.4-billion) it says it needs for fund its development. The deal with Yahoo looked made in heaven, as it would have given the U.S. group a decent platform to challenge Google’s YouTube.
The minister who opposed the deal, Arnaud Montebourg, is pompously in charge of “productive development” – whatever that means in French socialist lingo. He was previously a lawyer, known mostly for his long-winded rants against globalization. After Mr. Hollande’s pro-business speech and initiatives earlier this week, the Yahoo snafu suggests either that the President doesn’t get it, or that he doesn’t control his ministers. It’s hard to tell which is worse.