Friends Reunited on the Block Again

We all look and wonder at the lustre of social networking sites. One minute they are the vision of a student or wanabee millionaire, the next they are attracting significant traffic and wild market valuations. However for every success there are hundreds of failures and success does not always mean that they are sustainable.

Look at MySpace with its starlets, Ms Allen and the Artic Monkeys. Once the ruler of the social sites, it now has to sit below Facebook. We once thought Sellstudentbooks.com was going to make it but alas not. We often have joined these sites and once the initial momentum is over, realised that they often aren’t the universe they claim, are hard work to maintain and left them as quickly.

Now what we would regard as the granddaddy of them all, Friends Reunited looks like it is going further down the slippery pole, with widely reported rumours that ITV may sell it for just £15 million. In December 2005 ITV paid £175 million for the site! However, ITV still reported a £18 million contribution from Friends Reunited in 2008, though this was down from £22 million in 2007. So a sale may earn out quickly if the friends stay reunited.

For Sale - Friends Reunited

Broadcaster ITV is to let 600 jobs go and are looking to sell its Friends Reunited and Scoot websites. Chairman Michael Grade is widely reported saying that “Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting’

ITV bought Friends Reunited in 2005 for £120m and it was one of the original social network sites linking old school friends and soon extending this to workmates etc. The site may have been at the forefront but was quickly superseded by the likes of MySpace and Facebook and only generated £10million in revenue last year down a cool £1million over the previous year.

Some suggested that the Facebook acquisition was a brave move at the time and at a high cost. Irrespective of the advertising downturn many would argue that Friends Reunited had lost its way and appeal. It clearly went commercial and lost its social appeal for many. Although it makes claims to millions of members it would be interesting to see its churn and active membership. It would be interesting to see who would buy it, at what cost and with what plans.

Now ITV has cleared its decks, we await the next announcements from another UK broadcaster later this week.