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Grillo Ushers In Politics-for-Profit With Google Ads

Beppe Grillo’s electoral success in Italy is helping the business side of his political venture.

Beppegrillo.it, a blog he owns that serves as the virtual home to his Five Star Movement and its 162 national lawmakers, is bringing in funds after signing up for Google Inc. (GOOG)’s advertising service. Five Star gets none of the proceeds and funds itself on donations, according to Grillo.

“That advertising gave us some breathing room to cover the costs of the blog,” Grillo said in an interview May 24 in Siena, Italy, adding that the site lost money in recent years. When asked about the blog’s potential to make profits, he replied, “Is it a crime to make something profitable?”

“Anyway, if you can dig up a profitable blog, I’ll put 100 euros on the table.”

At the growing intersection of politics and profits, Five Star’s electorate, which swelled to a quarter of Italian voters, is the website’s market. Grillo has worked to win its loyalty. The ex-comic and anti-establishment crusader shuns interviews with domestic newspapers and television networks. Instead, he directs supporters to the website and tells them they can’t trust other media outlets.

That message resonates in Italy, where three TV stations are run by the state and three more are owned by Silvio Berlusconi, a former premier and currently a partner in Prime Minister Enrico Letta’s coalition government. Grillo uses his website to rebut news stories and TV reports about Five Star.

Beyond the ads for Starwood Hotels & Resorts Worldwide Inc. (HOT) and insurer Aviva Plc (AV/) that have appeared this year, the blog also solicits donations for Five Star.

‘Wide Audience’

The blog has the elements of “a great place to make money,” said Pietro Paganini, who teaches business administration at John Cabot University in Rome. “It has a very wide audience.”

The blog’s web address, beppegrillo.it, appears on the Five Star logo that adorns campaign posters and official ballots in the voting booth. The blog has a page dedicated to Five Star, containing electoral lists, a forum and its policy program. That page didn’t have advertising this week.

Five Star refused to accept the 42.8 million euros ($55 million) in public funding it says it is entitled to for the nearly 9 million votes it won in the Feb. 24-25 general election. The party’s lawmakers, political neophytes swept to power under Grillo’s banner, are required by Five Star’s code to return a portion of their salaries to the state.

Party Donations

The party collected 774,208 euros from 9,789 donors through April 11, according to the website. Grillo travelled Italy in a camper during the campaign, making stops in more than 70 cities and broadcasting his rallies live through the website.

Grillo’s campaign against the use of public subsidies pushed Letta last week to announce his government is preparing a bill to abolish state financing for parties.

Grillo’s blog ranks 146th for traffic among Italian websites, according to Amazon.com Inc. unit Alexa Internet Inc. Google, Facebook Inc. (FB) and Youtube.com were Italy’s top three sites, according to the ranking. Grillo’s site was one spot below Yahoo! Inc. (YHOO)’s Flickr photo-sharing service and 36 steps above Microsoft Corp. (MSFT)’s Skype.

Grillo has taken to his blog this month to assert that Berlusconi oversees “the obscene partnership between illegality and democracy,” and dubbed Letta “Captain Findus” after a brand of freezer-stored fish-sticks. Ads on the English language portion of the blog included Amazon.com’s listing of Gianluigi Nuzzi’s book “Ratzinger Was Afraid” and a promotion for online Italian language lessons through Yabla.

Rome Vote

Five Star’s candidate in the first round of Rome’s mayoral election this week garnered about 12 percent of the vote to finish third. Ignazio Marino, of Letta’s Democratic Party, took 43 percent, while Giovanni Alemanno, the incumbent from Berlusconi’s coalition, got 30 percent.

Grillo, 64, was a success as an entrepreneur before founding the blog eight years ago with the website’s curator, Gianroberto Casaleggio. In the 1980s and 1990s, Grillo was a political satirist who built his celebrity pitching Yomo yogurt in a series of TV spots. That notoriety, combined with his website posts and rallies, helped him gain a following for his blog, and then turn Five Star into the country’s third-biggest political force.

DVD-Funded

“We started the blog in 2005 and initially funded it with the DVD of one of my shows,” said Grillo. “Then we went ahead with the movement.”

The website is where Grillo’s rallies are broadcast, and that’s where his 1.2 million followers on Twitter Inc. end up when they click on links in his posts. Grillo’s Facebook page, which has more than 1.3 million “likes,” also contains links to the blog. Parliamentary events involving Five Star members are shown live in streaming.

The website’s financing was in the news last week after “Report,” a television news program on state-owned broadcaster RAI, ran a story asking Grillo for an explanation about its profits.

Casaleggio Associati, the Internet consulting firm started by Casaleggio after his tenure at Telecom Italia SpA (TIT) ended, has covered the blog’s financial shortfalls. In 2011, it had a loss of 57,800 euros on revenue of 1.4 million euros, according to the blog. At Milan-based Telecom Italia, Casaleggio served as chief executive officer of the Webegg unit.

Adding Ads

“In 2012 the costs became unsustainable,” a posting on the website signed by Grillo’s staff said on May 21. “Advertisements were introduced, though not for all categories, to avoid having to close it.”

The website has six or seven people working on it and the cost of the server that hosts it is 300,000 euros a year, Grillo said in the Bloomberg interview. Grillo said he hasn’t made profit since he stopped doing comedy shows to focus on politics. His goal is to bring Five Star into government and then step back from politics.

“I will resume what I was doing before all this,” Grillo said. “If there’s a microphone and an audience, then to me there is not a big difference between a show and a rally.”

To contact the reporter on this story: Andrew Frye in Rome at afrye@bloomberg.net; Lorenzo Totaro in Rome at ltotaro@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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