ITV wins race to buy Friends Reunited for as much as £175m

LONDON - As predicted, ITV has acquired internet business Friends Reunited for £120m and an additional £55m, if performance targets are hit by 2009.

The deal gives the combined sites of and the eighth largest online presence in the UK in terms of unique users, ranking behind the likes of Google, Yahoo!, eBay and the BBC. 

Friends Reunited will operate as a standalone entity, although ITV will integrate its management team, led by chief executive Michael Murphy, with and ITV Local management teams to bring together the group's online expertise and push ITV's online offering.

From today, Friends Reunited and ITV will work together to create online promotions, links, brand extensions and open up new areas of revenue including dating, recruitment and classifieds.

ITV was last month tipped as the leader in the race for the website, which brings old school, university and work colleagues together for.

The broadcaster saw off competition from rival bidders BT and the Daily Mail & General Trust.

The £120m acquisition, made up of a mixture of cash and shares, is part of ITV's wider strategy to build content-based businesses which create direct consumer revenue for the network.

Friends Reunited is expected to make £12.4m revenue and £6.6m on target earnings for the year ending 2005.

Jeff Henry, chief executive of ITV's newly formed consumer division, said: "The acquisition of Friends Reunited is also a key step in the delivery of our strategy to drive new revenue streams for the company. I am confident that Friends Reunited's unique sites and comprehensive subscription base, combined with ITV's services and vast range of content will prove both compelling and profitable."

Murphy said: "When ITV approached us we immediately clicked; they share our values, they're a national institution that is trusted and well loved and by joining with them, Friends Reunited gets access to a vast audience so we can even more people even more of the time."

Friends Reunited, which has notched up 15m UK members and more than 1m paying subscribers, was launched in 2000 by husband and wife team Steve and Julie Pankhurst.

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