Zlio is revolutionary, too. It lets users create and personalize a virtual “storefront” on Zlio’s site. Users fill their stores with goods aggregated off other ecommerce sites, and then sell them there, earning commissions while they do it—as if they were operating their very own Web-based bazaar! The service is gaining momentum: 100,000 shops have already been created, largely in France, generating a monthly turnover of $700,000 to Zlio partners, and $80,000 to Zlio and its shopkeepers. Top sellers making up to $750 per month!

Large e-commerce companies, such as Amazon, love “long tail aggregators” like Zlio because the combination of a user-generated (read:free!) sales force, plus multiple points-of-sale makes it easier to get more out of even small, disparate transactions. Amazon, a merchant partner of Zlio, even has its own “long tail aggregator,” called aStores. But this strategy endorsement comes with a hitch: Amazon is now barring Zlio users from selling their products in the US.

Talking about niche content, Glowria, the France’s Netflix clone, has just raised another $8.3 million (this on top of $5.5 million raised last year) to develop its VOD business. Glowria is the clear DVD rental leader in France and Germany with its library of 13,000 titles and 35,000 subscribers. But VOD is where the market is going, particularly among 15-25 olds. Separately, Glowria’s founder, Mihai Crasneanu, just vacated the CEO post, we think to start something new—which isn’t bad news: it means France is about to baptise another serial entrepreneur!

Meanwhile, France’s Web 2.0 heavyweight Netvibes made headlines this month for a different reason: co-CEO Pierre Chappaz left the company after disagreement over how to evolve Netvibes’ business model. The challenge: to gain an edge over iGoogle and others. Tariq believes this can best be done by focusing on innovation—bringing the newest applications, third party feeds and widgets to Netvibes’ users. Pierre wanted to focus on growing revenues immediately through such things as branded services. It’s not surprising that the founder won out, but like most Web 2.0 companies, Netvibes has only so much time to prove a correlation between the strength of its community and its ability to generate cash flow.

One Web2.0 company that needn’t face questions about its business model is Vente-Privée, which introduced French consumers to the concept of private sales via the Internet. The site’s discounted auctions quickly became a social phenomenon here: Earlier this year Vente-Privée sold 100 Peugeot cars at a 30% discount in minutes.

The site now has 2 million active users and has doubled its revenues to $330 million in 2006. Their projections for 2007 are $480 million. This explain why US-based venture fund, Summit Partners, recently acquired a 20% stake in Vente-Privée, valuing the company at $1.1 billion. Just think what will happen when Vente-Privée expands beyond France!

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Why iPad 2 Will Lead Consumers Into the Post-PC Era
• The Near-Term Evolution of Social Commerce
• Content Farms: The Players, The Benefits, The Risks

Broadband and Cultural roots, for starters!

France is one of the biggest broadband countries in the world, allowing its 15.3 million odd broadband users to experiment with some of the latest technologies over blazing fast Internet connections. Free WiFi is becoming commonplace. It is no surprise that one-in-five of us has a personal blog, a website or has published personal audio or video content on the Internet. France’s leading blogging platform, Skyblog, hosts 9 million blogs now, and according to Alexa, is the second most-visited web site in France after Google, (It is the 32nd most-visited site, globally!)

The easily availability of super-speed connections has made video and essential part of French Internet life. France’s leading a video-sharing platform, known as Dailymotion, already gets 35 million unique visitors per month. Dailymotion is the #2 video site behind YouTube, with France making up a big component of its traffic. According to ComScore, French consumers spend a greater percent of their total hours online viewing streaming video (13%) than do consumers in the UK (10%), in Germany (9%) – or even the United States (6%)!

Secondly, France, also has a financial infrastructure to support the start-up activity, with 25 venture capital funds of various sizes, that specialize in early-stage financing, among them Soffinova (France’s largest venture firm), Iris Capital, i-Source, and Innovation Funds (FCPIs).

Third, is the a small but active group of entrepreneurs who tasted success with their earlier companies and are now investing in other start-ups, much like Silicon Valley angels. These include Jean-Baptiste Rudelle, founder of Criteo; and Loic LeMeur, who till recently led U.S.-based Six Apart’s business operations in Europe.

As successful as they’ve been in the consumer space, French startups are now busy taking Web2.0 plays into the enterprise: BlueKiwi, which just raised $5.4 million (€ 4 million) from Soffinova, specializes in Web2.0 software solutions (a mix of blogs, wikis and other social networking platforms) for big corporations such as Danone, Dassault and the French postal services.

French entrepreneur Jerome Archambeaud founded and sold two startups, Avence and VRTVStudios, both in the early 00′s. Previously, Jerome served as Skype’s country manager for France and Belgium, and as a marketing director at Walt Disney Europe and Nestle Brazil. He holds an MBA from the Harvard Business School.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Report: Cleantech’s Third-Quarter Growing Pains
• Opportunities in LED Solid-State Lighting
• Why iPad 2 Will Lead Consumers Into the Post-PC Era