APN invests in Pollenizer’s Friendorse

news Newspaper group APN News & Media has confirmed that it is investing in the Pollenizer-backed startup Friendorse. Pollenizer is a digital incubator business which specialises in co-founding businesses with strong non-technical entrepreneurs, and has collaborated with over 100 online businesses since its inception in 2008.

The first of two investments by APN is a step towards creating innovative businesses aligned with APN’s core media assets and expanding its digital portfolio, according to a statement issued by the company. APN’s current digital portfolio includes The New Zealand Herald, GrabOne, Sella, CC Media and Jimungo.

Friendorse, a startup cofounded by Pollenizer, is a website that focuses on community recommendations for businesses and services within a neighbourhood. It is a search engine that specialises in harnessing local knowledge to help people get information about a particular business in a location.

APN, with a 25 percent stake in Friendorse, will work with the latter to integrate the offering with its publications in the Australian regional media business. Matt Crockett, Chief Development Officer, APN said: “Part of APN’s strategy for our regional publishing businesses is to provide more services and useful local information relating directly to those communities. The Friendorse model based around recommendations is a good fit with that strategy.”

APN’s investment decision comes after a successful trial of Friendorse in three key markets for Australian regional media. Phil Morle, Co-founder Pollenizer, said that APN’s entrepreneurial approach and their strong position in local markets was the perfect platform to facilitate the growth of Friendorse.

Pollenizer’s methodology with startups involves a trimester system, which includes one month of discovery and three months of validation at the end of which the business is ready to be presented before real customers or venture capitalists for further funding. Pollenizer’s autumn session begins in April 2012 for which applications are being received in January. The company’s past projects include Spreets, Linqia, Dealised, Wooboard, Little Red Box etc.

APN’s second investment will be a jointly funded vehicle by APN and Pollenizer to identify new digital business models aligned with APN’s core businesses in outdoor, publishing and radio. APN Outdoor is the largest outdoor advertising company in Australia and New Zealand. “Pollenizer has developed one of the most successful and lean rapid development processes in Australia. The partnership is an excellent opportunity as we look to accelerate innovation” said Crockett.

Morle also said that while it might be challenging for startups to work with large established media groups, APN has a strong track record of working with entrepreneurs. “Pollenizer sees that as a strong basis for entering into our first innovation partnership with a large corporation” said Morle.

opinion/analysis
It’s no secret that newspapers are looking for new revenue models, and it looks like what APN is attempting to do here is bundle together its obvious links with local businesses with Pollenizer’s strong grasp (through Friendorse) on the dynamics of social media, recommendations and so on. It’s a fascinating partnership, and potentially a natural evolution for Friendorse, which does not appear to have taken off that much so far in Australia, but will obviously receive an instant injection of traffic and users through the partnership with APN.

The partnership may also lead Friendorse into a new business model that could see it partnering with other publishers, if the APN partnership is successful. It will be interesting to see what APN’s view on that would be (given the company now obviously owns a stake of Friendorse).

However, personally, I’m far more interested in the ‘jointly funded vehicle’ which APN and Pollenizer are setting up. What is effectively going on here is that APN is attempting to apply Pollenizer’s radical outside-the-box startup innovation thinking style, which is great at coming up with business ideas and commercialising them, to the ailing publishing industry. Pollenizer already has some expertise in this area through its portfolio company Mogeneration (which focuses on building iPad apps for publishers), but has yet to really get in bed with the publishing industry that deeply.

It will be fascinating to see what comes out of this collaboration. Could Pollenizer be the catalyst that helps change Australian publishing for the better, unlocking new and innovative business models? I’m not sure. For all its glitz, glamour and sheer solid connection with its customers (readers and advertisers), publishing is a fraught and complex business, and its future is still unclear even in more advanced countries such as the US. Mogeneration has been a good start for Pollenizer, but even the iPad publishing model has yet to really prove itself in Australia. There are now stacks of iPad magazine and newspaper apps out there … but is anyone actually using them?

In any event, at this stage, I can only see the relationship as a positive move. It will be interesting to see what Pollenizer’s ongoing engagement with a mid-sized company like APN will bring.

Image credit: Friendorse. Opinion/analysis by Renai LeMay