ITV to cut value of Friends Reunited- report
- Added:
- Jan 06, 2009
ITV is reportedly set to cut the value of Friends Reunited as part of year-end review of past acquisitions.
The Sunday Times reported that the review, which is undertaken by ITV CEO John Cresswell, is expected to conclude that Friends Reunited is worth less than when the firm bought it in December 2005.
ITV paid £120m upfront for the website hoping to boost its web presence. However, the price rose to £175m after Friends’ management team met the conditions for a maximum earnout three years later.
The Times said that Cresswell will conclude in his review that concludes that the website is now worth less than the total £175m. The paper did not specify how much ITV will now value the company.
Acording to the paper, Cresswell said the slowdown in growth was caused in part because Friends Reunited stopped charging for access to its site in a bid to draw in more users and advertising income.
Freinds Reunited was a pioneer of online social networking but has been overshadowed by the popularity of Facebook and Bebo.
ITV’s online revenue growth slowed in the first nine months of 2008 despite a jump in visitors to ITV.com.
Income went up 6% to £25m, raising concerns that the company may not meet its revised target of £150m of online income by 2012.
Some 8.2m people used ITV.com in October and 82m videos were watched on the site in the year to September.