Whoa: AdultFriendFinder May Have Been Acquired For $1 Billion+
Michael Arrington
95 comments »
Update: Penthouse Media Group may be the buyer.
The world’s basest online dating site may have had a major liquidity event. Palo Alto based Various, Inc., which owns AdultFriendFinder and scores of other sites, has been acquired, says a source with knowledge of the deal. This is a single source rumor, but the quality of the source suggests, as it has in the past, that the rumor is accurate.
The company, which was founded by Andrew Conru, is rumored to now have revenues in excess of $300 million annually. The acquisition price is said to be 3x revenue, or around $1 billion.
We’re digging now for confirmation of the deal, and to find out who the buyer is. There’s a recent article on the company with deep background information here.
massive affiliate network that leads the adult industry. I’m not surprised at the valuation, unlike a lot of 2.0 movers in this space they have a proven revenue model.
I read somewhere that affiliates are paid $1 per click. a lot of money flows through this site…
Michael
depending on the quality of the traffic that’s correct, they offer a variety of options to affiliates. They also offer for memory about 10 variations on the theme, including non-porn/ sex focused dating sites as well.
Duncan - and how do you know so much about it?
ya Duncan, how are you so well informed?
.
Looks like Duncan is a power user
looks like ur all power users.
Happily admit: I’ve got an Adult Friend Finder affiliate account. Their dating stuff pays pretty well compared to most programs, particularly against celeb/ gossip stuff on the general dating product (I use to run that gossipy sort of site). Great product and generous payments…it’s why they’ve gone so well and I think that they’re worth it. In a sea of affiliate programs they really do shine well.
that’s hott
Ouriel, I just checked out the Enso video on your website….. Those guys have a brilliant application.
.
lol Duncan the smut peddler :p
Aaronontheweb
which part of they don’t just run sex swapping did you miss…mind you, not that’s there’s anything wrong with porn
It’s a very good post. Adults only
wow can’t believe 1 billion.
The internet is for porn!
http://www.carversation.com
why? these guys do amazing traffic and have a huge affiliate base that has really become the Adsense of the adult space. It’s worth this and maybe a bit more.
Dang, at a $1 a click, I should be an affiliate.
But, the significant other might have something to say about that.
That affiliate base must be crucial to its success.
If this proves to be true, they sold out at the right time. All the free adult themed social networking sites are finally catching on a bit.
Probably selling it now that they’ve been busted for using Zango to promote their program and buying keywords on other sites.
jaysin is from gfy!! dont trust him, he is huge smut peddler!
I’ve never signed up for an account with AFF, but alot of people say that site is cluttered with fake profiles of women - to get guys to join.
and when you do signup, you get bombarded with adult spam offers to join their sites.
some even say AFF has a ratio of 100:1, women:men on that site. so unless you’re a gay male or something like that…the chance of a straight guy getting laid by a female is very, very slim
As far as the acquistion price goes…3x multiple, that’s kind of on the lower side of acquisitions - it’s basically a bargain
lol - i’d possibly buy it, if i had 1B sitting idle
I think it is acquisition price is lowest, they could have deserved for more better price.
They doesnt pay you $1 per click. There is a bit of fraud there.
When you sing up to start offering traffic to them you can choose from Cost per Click or a % of the money they get from paid members refered by you.
Almost everybody choose Cost per Click, but almost nobody notices that they say, in small text, that if your traffic its no “quality-traffic” (users who ended paying) they can convert your account in a pay per % anytime they want. The problem is that always they to that when you are going to get paid for all the trafffic you had sent.
And by the way, i cant get why are they selling for that low price.
Why a company that generates $300 million in revenue per year would need one billion dollars right now if they can get them in just a three year period?
RARE.
Couple points…
1. I work on the tech side in the adult industry. Points for a site who can get members “laid”. These guys do it according to anecdotal evidence i’ve heard.
2. Great affiliate program for sure. In the end the Revshare part of their program works best, not the CPC. If you’re sending traffic to promote a bunch of similar “adult” dating sites, they are among the top in payments.
3. Experience. They’ve been around forever. They know the territory, they have the members to back it up too.
4. Maybe the founders just want to sit back and retire after many years of hard work now. To that end Congratulations!!
congratulations I suppose?
Sitespaces revenue all comes from Medley Inc, the company behind the friendfinder sites.
What does this mean for us? We send millions of hits there.
I think I’m going to look for another partner right now sooner than later.
“I read somewhere that affiliates are paid $1 per click. a lot of money flows through this site…”
No, it’s based on revenue shared from subscriptions. There are 3 different programs you can use. SiteSpaces.net has been on it for months now and it made WAY the hell more than google adsense.
People on Social networking will not click unless they see some titteaaas. That’s just a fact. If you wanted to monetize social networking AFF was the shiznit. Now I dunno.
“Looks like Duncan is a power user”
Don’t mock it. I used it for like 2 months and it got me a date with a lactating milf. I chickened out and didn’t go though, because I found out that she was in fact way more freaky than she initially told me. I do have the whole text message back&forth still on my cell phone if you want to see it.
http://siteanalytics.compete.c.....?metric=uv
Fling.com has been catching up fast to AFF and is set to pass them.
Rumors have been going around for months that penthouse or playboy aquired Adultfriendfinder.
Anybody who doesn’t believe that sex sells should read this blog entry again. True or not, they have the closest thing to a money printing machine second to Google and Microsoft.
Jon
“Anybody who doesn’t believe that sex sells should read this blog entry again.”
If AFF ads went up on MySpace, it would be an instant financial killing. Literally.
The revenue from AFF on our social networking site went up 10000% when I started using AFF instead of adsense.
Never underestimate the plight and body chemistry of males. Even the most professional will yield to nature and click the boobies.
This might be, indeed, the biggest online scam of all time.
After digging in (professionally, if you know what I mean) few years ago it seemed like a simple dating scam - one that even Yahoo! has been accused of in the past. Fake profiles, fake messages, just to get you hooked up.
In Finland, where I now live, you can still see the same faces in the affiliate ads. The locations, cities and local suburbs, are drawn from databases - everything looks and feels the same as in the States, but the profiles (look and feel) are totally same. This is totally a scam.
The service is obviously highly profitable, and the low revenue multiplier tells that the buyer knows what’s going on.
Adult entertainment business is nicely protected from class-action lawsuits, just as drug dealer. Nobody really wants to come forward if they feel being scammed, but rather pay for their mistakes and then just shut up.
Doesn’t AFF own the backend behind Nerve/Onion/etc. personals?
It’s funny that most of you guys are surprised, but this is something with actual value
damn, that’s hot. let’s hit it tonight@
Medley lists their own sites as their clients
http://medley.com/go/page/serv.....ite=medley
It’s so much like Intermix, even Claria to an extent. I don’t think they own the backend behind the Onion modules though.
“Nobody really wants to come forward if they feel being scammed, but rather pay for their mistakes and then just shut up.”
I disagree. As a user I actually found a bug on AFF and called them up to report it. It was a severe bug that allowed anybody to hijack an account. I found it by accident. At that time I found out that they too use bugzilla to track their bugs.
The only people that would really be ashamed of using AFF are those that are married and cheating.
How can you be ashamed, you have to put your picture up on your profile for the world to see? What you’re saying is counter-intuitive.
Really Duncan!
Have to agree #35 . In the uk you pictures and the location/details of the user change constantly.
So you get a picture of one hot girl and on one site she will be 22 from manchester and on another site she will be 21 from Davenport and so on.
Its a fake. It suprises me that people pay to use the site.
“Its a fake. It suprises me that people pay to use the site.”
The ads on AFF picturing women all have this text below them:
“Illustrative Purposes only. Not actual members”
The members on the website are 100% real.
Hey guys Medley, remember who stood up for you against the FUD wave when you weren’t paying attention.
adultfriendfinder makes its money by advertisding on content theft sites like torrents and child porn sites..
this is a stupid move as the new owners wont be able to make a profit unless they continue to advertise with the same model.
The rest of the adult industry despises aff as they are the largest company that pays thieves to advertise.
there are numerous sites like megarotic , that offer only 2 things. #1 stolen content/child porn and adultfriendfinder ads.
p.s. they were also involved in a relationship with one of the most prolific spyware sites on the internet ( zango )
using this business model and the use of spyware they were able to steal signups from other adult sites.
people who thought they were signing up for sites like “playboy” were actually tricked into signing up with adultfriendfinder thus making it impossible to cancel.
The low valuation is really surprising. Hell if youtube got 1.5 billion before it really took off and had absolutely no revenue model, how can a site that makes 300 mil a year only have a 1 billion dollar valuation?
“there are numerous sites like megarotic , that offer only 2 things. #1 stolen content/child porn and adultfriendfinder ads.”
How is that their fault?
You could take an adbright js code and put it on any page as well.
They have so many affiliates they can hardly check all the HTTP referrers with the small staff they have.
This is a tiny company to have a 1B buy out.
I for one love adultfriendfinder. They’ve made me a lot of money in the past. I currently run them at http://www.abum.com
“How is that their fault?” chris r.
i dont know , how would you feel making your money from the exploitation of children ? how would you feel knowing your company advertises next to films of children being molested.
the main reason i suppose is that they know it takes place and do nothing to stop it.
go check the alexa rank for megarotic.. it would be hard to miss them
Michael Arrington,
Change the AFF image that illustrates the post and put a AFF affiliate banner. Easy cash :), eh?
The ads they show on various sites are just that - ADS. Not the real people from that locality.
C’mon - that’s pretty standard for advertising. You think every celebrity that endorses a product actually uses it? There is some dissociation between the message and reality.
btw safeway ( the grocery chain ) bought adultfriendfinder
I’m still chucking at “major liquidity event”.
Not to mention “lactating milf”.
Porn stars are making major money on the site too.
don’t be shocked if it turns out that one of the major webcam companies bought it.
“the main reason i suppose is that they know it takes place and do nothing to stop it.”
You don’t know that for sure. That’s a serious allegation. Perhaps you should write them and find out. Here’s the email of a high mucky muck(TM ESR) at AFF you can write to.
charlyn_AT_friendfinderinc.com
I bet once they find out they will block their ads from that HTTP referrer.
Just giving you a hard time, which is also what I believe those ads are intended to do.
I am not surprised at this. It is simple - Sin sells. Holy things don’t sell in this world. Narrow is the road that leads to life and Wide is the road that leads to destruction.
I guess some people don’t care about the business model regardless of the moral implication of it as long as they make money from it.
I can’t wait to receive bashing that follows this comment
“I guess some people don’t care about the business model regardless of the moral implication of it as long as they make money from it.”
Sarah, the tobacco companies, the oil companies, the lobbyists. Wake up. The only thing good in IT is the FSF and GNU, and people write them off as being communists and hippies even though their software powers 75% of the modern world.
Why did fox almost pay to have OJ write a story about how he killed somebody?
Even if he didn’t do it, it would have been in terribly bad taste.
Telling us that large corporations are bad is like telling an adult there is no Santa.
@Sarah:
Why is it a sin if 2 consenting adults want to meet and have some fun without harming anyone else?
Get some perspective. And open your mind to question what is truly right vs wrong.
Morals are the truly right vs wrong.
Your definition of this “sin” is based on your narrow conditional ethics.
“Why is it a sin if 2 consenting adults want to meet and have some fun without harming anyone else?”
Sin implies religion. Specifically Christianity. So she was right, it’s sin.
That being said sin isn’t necessarily morally wrong if you are an atheist like myself or if you practice another religion that allows such things. Legally, there’s nothing wrong with meeting somebody on the internet that way. It’s part of our freedoms. Though I am sure that is banned in countries that are less free than ours.
“That being said sin isn’t necessarily morally wrong”
I of course mean sin in the context of meeting a sex buddy online, and not what Christians believe sin is inclusively. Some of what is considered sin are clearly also morally wrong if you do not practice religion.
Ha. Thought the US of A was secular. When did sin and Christianity become so intricately tied together?
But then, every President goes to T’giving mass. So much for separation of church and state.
So Chris, is it right or wrong? Wrong=sin. So take a stand
Finding a sex buddy on the internet? As long as you’re both adults, it’s A-OK in my book.
I’m also against the Texas sodomy laws. While I’m not gay, I don’t think the govt should legislate against people based on sex.
http://www.cbc.ca/canada/nova-.....ml?ref=rss
Our politicians here are gay. They would get thrown in jail in Texas under their existing laws. I don’t think the govt should impose on people’s freedoms, nor should religion.
Is 3x revenue really a low valuation? We dont’ know the margins, and this is adult content. My guess is that adult content revenue generally peaks pretty fast, so high multiples rarely makes sense.
Though I’m surprised that playboy/penthouse didn’t get into a bidding war over this.
World’s basest? Try world’s most honest dating site.
I’m not just an advocate… I’m also a user.
AFF was one of the first sites I was on. I met some sweet hotties! I’m actually STILL a basic member.
chris r wrote
————–
You don’t know that for sure. That’s a serious allegation. Perhaps you should write them and find out. Here’s the email of a high mucky muck(TM ESR) at AFF you can write to.
charlyn_AT_friendfinderinc.com
I bet once they find out they will block their ads from that HTTP referrer.
——-
the sites have been reported numerous times.
do a google search on them
i’ll take that bet btw.. how much are you offering ? i’ll even let you do the reporting
its not worth 1 billion or shouldnt be at least.
“Doesn’t AFF own the backend behind Nerve/Onion/etc. personals?”
Yep, bought them in 2005
jason is spot on, they get a billion bucks now for sponsoring every torrent and warez site on the internet, they buy ad spots from all the scammers. and of course 98% of the female profiles are fake.
there are rumours about a few lawsuits pending against them.
god i miss business 2.0.
-s
also… just what is penthouse up to ? are other porn sites going to start getting snapped up by them or rivals? are we going to see bidding wars? what a hysterically innocuous name. “adult friend finder”. genius.
-s
INTERNET = PORN
YOU ALL ARE GOING TO HELL (… and of course there’ll be more porn there)
This is really exciting news with 3.x the revenue. I think that it is a nice deal. Lucky
World’s basest?
Let’s hope the story is true. THE site, still runs like it did on dial up in 1999. The chat rooms have not been updated to use new technologies in 10 years. I know if Larry buys itwill improve it. Clearly Andy has pocketed every cent of the money and not improved the site.
Let’s hope he has at least bought a few new servers over the 10 years..speed would indicate he hasn’t
First of all, as a former insider, I haven’t reached out to confirm that the above rumor is true. I supect it is.
Second, most of the posters in this thread (with the exception of a few, including Markus, who was and I hope continues to be a very successful participant in the AFF ecosystem) are basing their comments on this post alone without insight into the AFF’s business or benefit of industry context.
What I will share is the following:
1 - AFF is the result of the efforts of one man: The Professor. His quirky personality, technical genius (he’s got a PhD from Stanford engineering for gosh sakes) and intense entrepreneurial business focus and determination are perhaps the single-handed determinants for AFF’s success. He is surrounded by a great team. But, he with another team also would have been successful. Another team, without him, would not.
The motivation for sale and valuation for the event are reasonable and, in fact, this is an exceptional outcome, based on several factors and influences:
1 - People. The founder is unbelieveable with technology. Managing the hundreds of employees, thousands of affiliates, etc. however, requires patience, empathy and ambiguity: people skills he has more difficulty with. Why continue the stress, headaches and worry? When you expect everyone to think and perform at your level, you’re inevitably irritated and disappointed.
2 - Regulators and Industry - There are or could be a lot of government and law enforcement entities, State’s Attorney’s General, FTC, subpoena’s, office raids, Sheriffs, IRS, banking authorities (especially when your’e running hundreds of $Ks daily on AFF member’s personal credit cards for monthly gold membership fees), etc. that don’t understand AFF’s business and are at least curious and investigative.
3 - Monetization and Liquidity - So, let’s say you have a $300M revenue / $100M EBIDTA business in the adult industry. How do you translate that to a real $1B payday. IPO? No way. Sell to large Internet company? Sure, like NWS or GOOG are going to touch AFF with a 10 foot pole.
I say great work. He deserves it. I hope that The Professor finds peace and enjoyment, postprandial. If you meet him, don’t call him Andy.
I for one, am still in a Thanksgiving mood. Gobble, Gobble.
Ok so lets start now with the countdown of how many days before AFF is sued for the purchase being devalued by what many claim as blatant theft from their affiliates and phony profiles, etc.. I have not done enough research to verify all the accusations against AFF but who ever bought them will soon discover that unless they continue these busienss practices they will not reap the same finacial gaines AFF claimed before selling.
Singles signed up to the site spread the “adult” stuff and the site like virus. Virus? Yes, they are spreading the viruses, herpes, hpv, hiv and so on. Maybe, people don’t know, AdultFriendFinder.com offer STD dating sites pozgroup.com a big resource to develop the site.
According to the CDC, there are over 65 million Americans currently
living with an STD, 19 million new STD infections each year, one in three
sexually active men and women living with Herpes, and about 50% of all
sexually active Americans affected by HPV. How many of these people get the virus from the people they find at AdultFriendFinder.com? We don’t know, but there should be so many.
Maybe sites like AdultFriendFinder.com are helping pozgroup.com to acquire $ 1 billion.
Maybe Penthouse can do something with the crappy quality of the site. People show they are online hours after they log off, women are on camera and the outdated site says they aren’t online. I could go on with the technical crap. Apparently the guy that runs this site spends his money on himself and paying people to create fake dating profiles that take you to his site.
However, they don’t send out fake teaser emails from the website, like most of their competitors. I joined Fling and didn’t post a pic, got 8 women interested in me 24 hours..and I wrote nothing..how fake. The AFF people just create fake profiles using porn stars etc. Goggle buy dating profiles and people are selling them, if you want to create your own dating site.
The valuation of the company does not solely depend on revenue. Some other factors to consider:
PROFITABILITY
Assets (intellectual property, patents, etc.)
Growth
Customer base
I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer ! I’m Spammer !
An exiting deal. As one of or the world basest communities in this market AFF has a lot of revenue over the years and a worldwide network of affiliates, which promote their sites. I think the price will be okay, for the seller and the new owner.
MAYBE THE NEW BUYER WILL MAKE THE SITE WORK AND NOT KEEP MESSING WITH IT FOR US PAYERS TO HAVE ISSUES USING THE SITE. EVERY DAY ITS SOMETHING WITH THE SITE…WHY I KEEP GOING BACK…WELL BECAUSE OF MY FRIENDS…BUT ITS RIDICULOUS..AND WHEN YOU CALL TO COMPLAIN, THEY DON’T DO ANYTHING…YET THEY WANT OUR MONEY?? WHATEVER. HOPE THE NEW OWNER DOES SOMETHING GOOD FOR THE SITE AND STOPS WITH THE PETTYNESS OF POSTING CERTAIN THINGS AND HOW STANDARD MEMBERS CAN ONLY DO VERY LITTLE…ITS PATHETIC….FOR THE PRICE OF SILVER AND GOLD AND FOR THE HASSLE YOU GO THROUGH…ITS NOT WORTH PAYING…WOULD RATHER BE A STANDARD BUT THEN I CAN’ VIEW THE POTENTIAL PPL I WANT TO MEET. ….EVEN IF THEY ARE ON MY FRIENDS NETWORK PAGE…WTF IS THAT ABOUT??
Rumor was that Amateurmatch was going to try and acquire them. Their site is http://www.amateurmatch.com