Value of social networking site tanks

LONDON — Commercial broadcaster ITV has taken a huge loss on the sale of social networking website Friends Reunited.

The cash-strapped web unloaded the site to Brightsolid, a subsidiary of Scottish publishing house DC Thomson, for £25 million ($42 million) — $252 million less than it paid in 2005.

News of the sale came Thursday as the broadcaster reported a net loss for the first half of the year of $117 million, which is a marked improvement on last year’s net loss of $2.5 billion.

Brightsolid will use the site and its subsid, Genes Reunited, to boost the FindMyPast.com Web service it offers to family history researchers.

Blighty’s competition authorities must approve the deal.

The sale of Friends Reunited is part of a package of measures executive chairman Michael Grade has put in place to save $478 million by 2011. This includes scrapping final and interim dividends, asset sales and deep cuts to costs and programming budgets.

Despite the reported loss, the company’s shares rose 5% on the results, as they also showed signs that the ad slump was abating. 

The company expects advertising revenue to fall only 7% in September, an improvement on the 12% drop it had predicted for the quarter as a whole, and better than results for the first half of the year, when advertising sales fell by $181 million, or 15%.

The company is in the middle of a hunt for a chief exec. The shortlist is thought to include ITV chief operating officer John Cresswell; Simon Fox, the chief exec of music retail chain HMV; Apple Europe chief Pascal Cagni; former BSkyB chief executive Tony Ball; and Guillaume de Posch, who used to run German broadcast group ProSiebenSat.1.

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