Update On AdultFriendFinder Acquisition - Penthouse May Be The Buyer
Michael Arrington
67 comments »
More on the acquisition rumor from yesterday - another source now says they were acquired by Penthouse Media Group, and the price was closer to $500 million. Whether or not a transaction has occured is still somewhat vague, but it seems clear from multiple sources now that Various, Inc., the parent company to Adult FriendFinder and other sites, has at least been trying to sell itself aggressively.
“Penthouse May Be The Buyer”
Good for them. Medley, buy our search engine and go the whole 9 yards. You can afford it now. Seriously, do it.
Its a good catch for penthouse. There are social networking sites like plentyoffishes and hotornot centered around dating. But with its service still being in subscription mode as I hear, wouldnt it be better if they are only advertising supported instead of making users shell out money?? Maybe it will increase their already $300 million revenue.
Second !!!
Oops
^ Epic fail
“^ Epic fail”
What you don’t understand about big business, is that these acquisitions are also about tax sheltering. If they don’t spend the money on gross, the govt is going to lay waste to it anyway. It will be spent in Iraq instead.
Having been on the receiving end of an acquisition that flew well under Mike’s radar a while back, I can tell you that most acquisitions are in Q4 before the end of the corp’s fiscal year, when they realize that the gross is a little too high. I can’t be positive that’s the case here, but it could very well be.
Strange that people still invest in companies with such questionable business ethics.. It feels very web 1.0..
SWEET! I just signed up…
…for the affiliate program pervert…teehee, tickle me pink and rainbow bears all over.
Acquisition price is ~500M?
That’s less than a 2X multiple…hot damn, this is looking more and more like a steal
Penthouse may be the acquire - that’s a good match for them.
i’d thought the ‘reality kings’ down at FL would acquire it, but i don’t think 500M is a easy to digest for them
lol - AFF is fake - fake women profiles.
if you want to get laid, you’re better off forming a real relationship with someone at eharmony or whatever is a legit site
I see ……… I see ……. know more …..
Thx for sharing ！★☆★☆★
Is it just me or does 500 mil sound a little low for a 300 mil annual revenue site?
“Is it just me or does 500 mil sound a little low for a 300 mil annual revenue site?”
The net may be as low as 5-10M. There’s no way a reporter is going to get that type of detail on a deal like this. That hot oil and those cold showers are pricey! The overhead could be staggering.
Chris R,
Thanks for clarifying that, I couldn’t understand how a company with 300M in revenue could sold his operation for ~500M, but even with a low Net the potential is too big to sell for 2X.
If sales potential was like 5-10times gross and not net our little company would be worth millions of dollars. That’s not how it works. The last major sale we had we got 6x net, not gross, and that was out there.
I can say that in at least our case, we did not release the sales figures before the company bought it up. So with that hidden it’s a real guessing game for the buyer. They happened to hit 6x net, but it could have been lower too.
I come back to the tax shelter, and this is just a guess on my part. Say they have X gross before Jan 1, then they have to get rid of it or lose it to the US or CAN govt. That will determine the selling price or the offer price in my opinion more than the actual worth of the company being bought. (how much do they need to get rid of)
Come to think of it Adam, that would really kill web 2.0.
If the purchasing companies simply said:
“open the books before we buy”
If the company being acquired says no you go to the next one.
No web 2.0 company could ever survive that. They can show traffic and users, but they can’t show profit. AFF is of course completely different in that sense.
/musing
The reason the price is low compared to revenue is that its a high risk business. Adult Friend finder is de facto a market place for prostitutes and their customers. It survives because there is no explicit link to an offline transaction and so it cannot be differentiated from a ’swingers’ site. But only the very naive would believe the later to be true.
I just need to see the title of the post to know a Mike A. post — pure garbage
“Adult Friend finder is de facto a market place for prostitutes and their customers”
Again as a Medley partner I would have to refute your claim and say that I never encountered one on there, though I did see cam whore spam(which is legal).
People really seem to hate these guys, and I think a lot of it is completely unjustified. They’re just a medium business trying to make money, and they finally made it. Can’t you be happy for them?
AFF is huge, why would they be selling?
http://www.GuessLotto.com
Lesson to the rest of us: people will pay for a web service that enables them to get something that they *really* want.
wow. they are huge.
Seems cheap if it is only $500M.
AdultFriendFinder was pioneer in the social network!! All the concepts camefrom them!! Myspace, Facebook all of you. Adultfriendfinder rules! You deserve it guys!!
This site amuses me. They have no clue. Who here was actually invited or part of the shareholder or VIP gathering earlier in the week?
I was..
And it aint Penthouse. Try again..
Hey, where is the closest Safeway around here anyhow? I need to go cash some stock.
Correct me if I’m wrong, but I guess Playboy (NYSE:PLA) is larger than Penthouse, and its market cap is still well below $500M.
Is that Duncan with that girl upfront?
you just wanted to post that picture again
If you want to get the real scoop visit gfy.com — it’s an adult webmaster board and is much more plugged into this scene than TC.
I agree that AFF _isn’t_ a forum for escorts to use, speaking to a few people in the industry they find AFF a good place to find f-buddies but would not advertise on there.
good for them
Finally! Andrew Conru had been shopping for buyers for many years, poor guy didn’t expect to grow so rapidly exceeding the other mainstream players (match, lavalife, yahoo personal etc). I say poor guy because none of the media giants were willing to associate themselves with adult content.
Finally someone in the same sector manages to offer a decent amount. o course with their impressive revenue model, if it were a more mainstream site, 500million would have been a bargain!!
haha that AFF pic looks like something from that hotchickswithdouchebags site. Good for AFF to get sold, not sure if $500 mil is a good value but I guess they make tons off ads and membership fees.
crazy, just crazy
I’m confused.
Oh yeah, watch The Office here - free!
http://www.cavenger.com/office.php
can we post a work safe pic please?
This rumor has been around a while. Conru and Bell both laugh at it. Trust me, I’ve talked to them about it.
if revenue is 300M and they were bought for 500M, that is one hell of a crappy multiple
Would those multiple sources be Joe, Moe and Curly by any chance?
Mike, I hope your account is working
it’s amazing! i think
the price is due to the amount of risk. Lots a angry partners = Lots a charge backs
Sweetie business =]
I wish I could own that site
uh oh only 500 million for the biggest sponsors of torrent, warez and other scammer sites
I hate to reading porngraphic context if I was rise upper-middle class family. I don’t know how many upper class family like to read this crap… Penthouse aquires adult site. Who cares… They don’t own stock like PLAYBOY.
No wealth investors should pay TAXES on sexual AIDS/HIV/STD publication and Healthcare for them. I don’t understand why would they break ten commendments. I don’t like idea… Commit Adultry or spread swingers diseases.
C’mon guys….although I don’t think TechCrunch needs to be held to the same fact checking standards of a NYT or WSJ, I expect to find news here that is *substantially accurate* and not designed to post a snazzy pic and headline.
First you suggested 500 million came in from hedge funds for Facebook as the MSFT deal unfolded and this was wrong. Then didn’t you jump on the MS aquiring Yahoo rumor mill (this could be true but I no longer think you have any more insight than I do) Now you say first “a billion” for AdultFF, now half a billion.
C’mon - too little news, too much BBS (billion bullsh**)
Conru has been trying to sell this thing for quite some time. His revenue is north of $200M so if he finally did find a buyer, and the number was $500M, thats at worst 2.5x sales.
And trust me, his margins are much higher than 3-5% which some of you have alluded to it being.
It’s just a business people don’t want to be associated with, thats the problem. It’s just like buying a building in east LA vs upper eastside. You’ll have a much higher return in east LA because it’s less desirable. That’s all there is to it.
I’m not sure why he’d want to sell though.
a funny news : )
Chris R. . . . its the weekend, you should stop astro turfing on Techcrunch and spend time with your loved one. . . (kids? girlfriend? boyfriend?) whatever it is. . . its better time spend for you. . . and for us especially.
Techcrunch, that’s 5 times in 3 days you did stories with this graphic, hmmmm, I’m sensing a pattern here!
that would be a worthwhile investment for Penthouse. A.F.F is a cash cow and it would help extend Penthouse’s reach to the internet even more so. Isn’t A.F.F. in the top 75 most visited site in the world? Online adult sites are kind of a guaranteed thing, so why not go after the biggest one.
wow - you guys really don’t have a clue.
The acquisition is for Various, Inc, the parent company of AFF, FF and 20+ other relationship sites. AFF is by far the largest revenue generator, but their webcam sites probably bring in a lot of dough as well. I certainly hope the price will be north off $500 million for Andrew and the gang, they deserve it.
There are lots of adult entities out there raking in the cash that you will never hear about unless you frequent boards like gfy.com.
What ever happend to the vice fund? I want in.
FYI Erosguide.com is for prostitutes, people swear by it, is that the next acquisition target?
I don’t know how Arrington does it. I was sitting next to him at TechCrunch Boston after-party at midnight Friday and he has time to post?
Its really a big amount !!
Hmm, I heard it was more of a merger than an acquisition. Plus the way these things usually go, upper management are typically the only ones to see any real profit. It would be great if it was an immediate windfall the the company as a whole though. Looking forward to hearing what the real news it.
Maybe Conru will stop micromanaging the day-to-day activities of the site and the various developers!? Hmm, maybe the programmers will start making more than CA min wage for programmers?
Conru and Mapstead say no sale:
http://www.avn.com/index.cfm?o.....561D1B850F
Its really a big amount
I don’t know if eros-guide will do well in a takeover, people don’t want to hear about escorts.
Perhaps it was the pending FTC ruling that held this up?
http://www.ftc.gov/os/caselist.....pfinal.pdf
Well now I operate a few sites myself and I wish someone would visit our site http://www.lifemyass.com as much as people visit AFF and for as long as AFF been on line I think they deserve what they have been purchased for by Penthouse.
Serious now They are big because they have worked for it just like the owner of plentyoffish. As for fake i doubt it …no many people that are members from our locality couples, males, females.
I would think e- harmoney more phony..as like a few other sites I can not to mention.