Beano owner buys Friends Reunited for £25m

LONDON - The publishing group DC Thomson said this morning it has agreed to buy ITV's Friends Reunited social network for a cut-price £25m.

DC Thomson has bought Friends Reunited
DC Thomson has bought Friends Reunited

The Beano owner, one of Scotland's largest newspaper and magazine publishers, said Friends Reunited will sit within its Brightsolid business, which was set up to 'link people and places on the internet'.

Friends Reunited was originally bought by ITV for £120m in 2005 but has fallen behind in the social media explosion of recent years, which has seen the rise of rival free social networks such as Facebook, MySpace and Twitter.

The major attraction for DC Thomson to purchase the Friends Reunited Group is to corner the market for genealogy, one of Britain's favourite pastimes.

DC Thomson already runs findmypast.com and ScotlandsPeople, and will now be able to add to its 'family tree' portfolio with Genes Reunited's nine million worldwide members.

The main Friends Reunited social network has 20.6m members but the group, which also includes Friends Reunited Dating, now only attracts three million unique users a month.

Chris van der Kuyl, chief executive of Brightsolid, said that the company saw an exciting new opportunity to build on Friends Reunited's iconic status and that the acquisition would create Britain's leading genealogy business.

But the social network's star has fallen greatly. In the three and a half years since ITV bought Friends Reunited, its value has dropped by £95m.

The social network was founded in 2000 by husband and wife team Steve and Julie Pankhurst and their friend Jason Porter. By 2002, Friends Reunited had eight million unique users and, in 2003, was taken over by co-owners Michael Murphy, Tim Ward and Rob Mogford.

At the end of 2005, ITV splashed out £120m on the site, with ITV Consumer chief executive Jeff Henry declaring at the time: "The acquisition of Friends Reunited is a key step in the delivery of our strategy to drive new revenue streams for the company."

At the time, Friends Reunited was the eighth most visited website in the UK, but now ranks as the country's 14th favourite social network, according to the Hitwise social network category.

Last year ITV finally dropped the subscription wall on Friends Reunited, which many saw as a major barrier to entry, and increased its dependency on ad revenue. A final throw of the dice from ITV included an £8m ad campaign that failed to reignite the British public's passion for the site.

December 2008 saw co-owners Murphy, Ward and Mogford walk away with an estimated £55m combined earn-out bonus, and rumours that ITV was looking for a buyer for the site increased.

New owner DC Thomson has emerged as a surprise buyer after other potential investors fell off the radar. Only last week, internet entrepreneur Peter Dubens was favourite to buy Friends Reunited for £15m.

DC Thomson, which is headquartered in Dundee, publishes popular comics The Beano and The Dandy, magazines including The Scots Magazine and has a wide array of regional and national newspapers including The Sunday Post, The Courier and The Evening Telegraph.

The publisher claims to publish 100m newspapers a year but has recently increased its focus on digital media. Brightsolid became the new name for Scotland Online, and in 2007 the group added to its own initiatives by acquiring findmypast.com.

The latest acquisition will vastly increase DC Thomson's online presence and will challenge the company to re-engage many people up and down the country who have fallen out of touch with Friends Reunited.

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