Jump to content
House Price Crash Forum
interestrateripoff

Itv Set To Offload Friends Reunited At £160m Loss

Recommended Posts

http://www.guardian.co.uk/business/2009/ju...eter-dubens-bid

Internet entrepreneur Peter Dubens has emerged as a potential bidder for Friends Reunited, offering to end ITV's disastrous experiment with online social networking at a massive 90% discount to what the broadcaster paid for the website four years ago.

ITV put Friends Reunited up for sale in February as the drop in online advertising revenues forced the company to dramatically writedown the value of a business that had cost it £175m.

Analysts believe Friends Reunited is worth about £20m to £40m, but private equity firm Oakley Capital is understood to have offered just £15m. Oakley is backed by Dubens, who also has connections through another investment vehicle with Michael Birch, the founder of rival networking site Bebo.

Despite speculation over the weekend that Oakley is in exclusive talks over a deal, ITV insiders maintain that several other parties are also interested and the price being suggested is very much at the bottom end of the range being discussed. An ITV spokeswoman refused to comment.

The broadcaster snapped up Friends Reunited for an initial £120m in cash, just before Christmas 2005, but it soon lost ground to newer rivals such as Facebook, MySpace, Bebo and more recently Twitter. While a move into geneology, allowing people to trace their family trees, saw the company increase repeat traffic to its websites, revenues have remained small.

In April last year ITV launched a last-ditch attempt to get back into the game, dumping Friends Reunited's so-called "pay wall" in favour of a free model. At the time it claimed 19 million people had registered since its launch in 2000, with 13 million of those using the site at least once in any 18-month period. That usage, however, is still paltry when compared with other sites such as Facebook.

Serial entrepreneur Peter Dubens snapped up a number of small internet service providers on the cheap when the dotcom bubble burst, including Homecall, set up by former Phones4U owner John Caudwell, and Bulldog, the residential broadband provider jettisoned by Cable & Wireless, and rolled them into his Pipex business. In 2007 he sold Pipex to Tiscali for £210m, now part of Carphone Warehouse's TalkTalk operation.

That's one big loss for ITV, lucky it's not in a financial mess!!!!

I was never impressed by friends reunited.

Share this post


Link to post
Share on other sites

I think friendsreunited was dead in the water as soon as Facebook appeared really; the previous owners did well to offload it when they did - those crafty old internet enterpeneurs :P

Share this post


Link to post
Share on other sites

Since when was it actually worth tens of millions to begin with anyway, its just a friggin website? The original owners must have been laughing all the way to the bank on what they earned from the sale let alone the horrendous 120 million that pathetic ITV paid. Never been interested in FR, Facebook, Myspace or Twitter, all been massively overhyped and overvalued. Too many of these companies throw around hundreds of millions like its nothing, look at M$ and Yahoo, how on earth was that worth so much, its just a 90s throwback that is plain ugly with a crap search engine.

Share this post


Link to post
Share on other sites
I think friendsreunited was dead in the water as soon as Facebook appeared really; the previous owners did well to offload it when they did - those crafty old internet enterpeneurs :P

Yup :P:P ....

Itv paying £175m for that is a PERFECT symbol of the complete INSANITY and STUPIDITY of the last 10+ years......

Pathetic.

Share this post


Link to post
Share on other sites

Yeah, I dunno really, seems like a missed opportunity of sorts... at its peak they did sign up a remarkable number of people, far more than facebook now, I'd imagine... but the design, functionality, charging mechanism, and so on didn't really lend itself to regular use...

Share this post


Link to post
Share on other sites

I think I created a Friends Renunited profile a few years ago for curiosity purposes. I was amazed at the percentage of classmates that had emigrated to Australia!

Share this post


Link to post
Share on other sites
If FR had started off by being free they would have been bigger than FB, myspace and all the others...

It was free initially, then they allowed you to put up a profile for free, but charged you to contact other members. Then it dropped off a cliff.

Facebook came along with a different business model, i.e. free to use, get as many users as possible and then earn your revenue from advertisers on your site, the advertisers being attracted by the almost exponential rate of increase in users. I think Friends reunited did eventually become totally free to use again, but by then it was too late and Facebook was totally dominant.

Share this post


Link to post
Share on other sites
and, sadly, thick as pigshit.

THICK is the new LIAR

thick loans.

Share this post


Link to post
Share on other sites
I think friendsreunited was dead in the water as soon as Facebook appeared really; the previous owners did well to offload it when they did - those crafty old internet enterpeneurs :P

I couldn't fooking believe it when this deal went through, it was clear that the site was a relic compared to Facebook etc at that point - a total "air purchase". Friends Reunited is the social networking equivalent of a telephone directory, and they even fooked that up by charging a tenner to use it.

Still I'll probably keep updating my profile, once every 3 years or so... :lol:

Share this post


Link to post
Share on other sites
Yeah, I dunno really, seems like a missed opportunity of sorts... at its peak they did sign up a remarkable number of people, far more than facebook now, I'd imagine... but the design, functionality, charging mechanism, and so on didn't really lend itself to regular use...

FR had 2.5m users at their peak. Facebook has 30m.

Edited by jackalope

Share this post


Link to post
Share on other sites

Some people don't half write things off around here. Just because FR was not worth £150m, that didn't make it a bad idea. It still is a good idea, but website fashion is unfortunately more important that webpage content. FR's business model of fee paying might be the very one that all the other more trendy networking sites are forced to adopt.

The notion that just because a website is large it can make money has been thoroughly trounced by the experience of YouTube, Facebook, etc. The absurd one time valuation of Facebook of $15 billion, against regular losses of between $100 and $200 million, just shows how Friends Re-united's problems pale in comparison. In fact, the larger the website, the more losses it will make. And this all comes down to a simple fact: You cannot generate a viable profit out of advertising alone on most websites, unless you are Google and/or almost everyone uses your service several times a day. It requires that level of usage to justify the advertising charges.

Eric is right though. The whole dotcom madness is due to ridiculously over-optimistic investors inventing wild fantasies and their partners fall for it everytime. Has nothing been learnt from the dotcom crash of the 90's? Answer seems to be "no".

But the subscribers are also naive, though their naivity does not do them any damage until one day they'll wake up and see they have no networking sites to use, and they'll revert to sensible and healthier methods of communication like picking up the 'phone or, god forbid, actually VISITING someone. At that point FR might well show an operating profit, but it will never recover the ludicrous price ITV paid.

Website users have been thoroughly spoilt by the assumption that networking is free. It isn't. They are paying for it by (advertising) proxy.

Edited by VacantPossession

Share this post


Link to post
Share on other sites
Surely as soon as one of these sites goes 'corporate' the appeal is lost.

There is a lot of truth in that.

I had a FR idea years before it happened. So FR did tap into a nostalgia that existed - and catching up with people and loves from our formative years was a market to be tapped. Very good idea from the site creators. It was a right moment, right time thing.

It most definitely wasn't worth the £160m ITV stupidly paid for the 'brand'. Mental and very poor business judgement. I wonder if the people who put the deal together are still in their jobs, or are they messing up somewhere else.

I have a FR contact point, but I'm reluctant to do a profile... this is why Facebook and Twitter don't appeal. It's really a cry for help!

BTW IRRO I posted this days before in off-topic, so there!

Share this post


Link to post
Share on other sites

If I wanted to form a list of businessmen I would walk through lava to keep away from the reins of anything I've invested in, all i really need do is get a list of the Board of ITV over the last 10 years.

I think the big questions is; have they actually made any decisions that turned out well?

Share this post


Link to post
Share on other sites
I had a FR idea years before it happened.

I had a "compare the Market" idea about 7 years ago. That we are both posting on here is evidence that neither of us followed them up!!

Share this post


Link to post
Share on other sites
I had a "compare the Market" idea about 7 years ago. That we are both posting on here is evidence that neither of us followed them up!!

Isn't price-runner older than that?

Share this post


Link to post
Share on other sites
FR had 2.5m users at their peak. Facebook has 30m.

that's a bit of an unfair comparison given FR is a UK-only site that made a few half-hearted attempts to link up to a similar antipodean site, whilst facebook is genuinely global.

FR's penetration of the uk population was astonishing given that most of those users were signed up in 2001/2002, when casual internet use was a fair bit less than it is now, and i think that the 2.5m is pretty conservative, e.g. this old article reckons 15m link. FR's problem was getting users to hang around and generate advertising/subs revenues [not an unfamiliar tale in the dotcom world], but it was utterly brilliant at getting people to sign up.

Edited by the flying pig

Share this post


Link to post
Share on other sites
Isn't price-runner older than that?

God knows, to be honest I guessed the years ago bit because I can't remember when it was and all I know was that I'd not seen or heard of the thing at the time. Maybe something else was already out there, I don't pay an awful lot of attention.

Now I think about it, it was a very long time ago because I'd been to an industry conference and had been talking about the power of the retail trade and was thinking about how someone could usurp that, and those conferences packed up eight years ago at least.

Share this post


Link to post
Share on other sites
I had a "compare the Market" idea about 7 years ago. That we are both posting on here is evidence that neither of us followed them up!!

I tried to get into the nostalgia business with an idea that could have led to something like FR (not techie enough). Said idea didn't gain the necessary critical mass - and failed. I still carry the scars. An example too of not getting into business with friends, who are less committed!

I was also thinking today that as a kid, fascinated with IOM boats (you'll get that), I came up with the idea of jet propulsion for the ferries speeding them up. Fast ferries (cats) are common now. My 'models' used straws through the hull to simulate the idea. I was a clever kid, who became stoopid!

Edit: English

Edited by tinker

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   296 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.