ITV acquires Friends Reunited for £175 million

ITV acquires Friends Reunited for £175 million

	Published : Tue, 06 Dec 2005 17:05 By : Richard Owen Print this Story

LONDON - UK's largest commercial broadcaster, ITV PLC has announced its intentions to buy the Friends Reunited website as it attempts to establish a significant presence on the Internet. The company is paying £120 million upfront and this could further be enhanced by £55 million based on target achievement.

Friends Reunited is a website that is based on the theme of reunion and helps find long-lost acquaintances. It was founded by Steve and Julie Pankhurst in 2000. Over the years, it has grown into one of the biggest portals of its kind and it was natural that other bigger firms would be interested in acquiring it.

Even though the husband and wife duo has stepped down from active management, they still own about 60 percent of the stock. Commenting on the deal, Steve Pankhurst said in a statement "When we started Friends Reunited in our spare bedroom in July 2000 we had no idea that what began as a hobby would gain phenomenon status." Pre-tax revenues next year are forecast to be in the region of £8.9 million.

For ITV, this is a nice way to make its presence felt on the Net. In recent times, many media groups including the Rupert Murdoch-owned News Corp are venturing onto the Internet for extending their businesses since their traditional areas are not bringing in the revenues.

The advent of digital services has hit ITV hard and it is natural that it has begun to look at ways to arrest the slide, “The acquisition of Friends Reunited is a key step in the delivery of our strategy to drive new revenue streams for the company. Broadband is reaching a critical mass in the UK and online advertising is set to reach a million pounds a year," commented Jeff Henry, the director of the ITV Consumer unit.

"We are embracing theses changes and this (deal) is not about us leaving behind our traditional business." ITV has recently ventured into the mobile and the broadband arena and the acquisition of Friends Reunited is another step forward for the company.