ITV made what is regarded as one of the biggest mistakes in Internet marketing history when they purchased the once useful Friends Reunited for £175 million four years ago.
Shortly after buying the website, Facebook emerged and started the mass exodus of Friends Reunited’s members to a website that was better, easier to use, offered more features and was, most importantly, free. It took Friends Reunited far too long to work out that while they offering a poor service at a cost, Facebook offered a better one for free. Only recently did Friends Reunited become free to use, but it was much too little, too late.
ITV’s efforts to enter the social networking arena were disastrous, much worse that Rupert Murdoch’s purchase of MySpace which followed the same pattern: purchase by a television network and an attempt to run it like a TV network with intrusive advertising resulting in the loss of members.
Now Friends Reunited is worth somewhere in the region of £15 million, 90% less than ITV paid for it. Some analysts believe that Friends Reunited could be worth up to £40 million, but as the website has been for sale since February it’s unlikely to attract bids of anywhere near that figure.
Should ITV sell it now for £15 million they would lose £160 million in just four years, but if they hold on to Friends Reunited any longer they’ll risk losing the lot as new sites emerge with even more features than Facebook, resulting in the once great Friends Reunited becoming a graveyard of a website.
Peter Dubens, an Internet entrepreneur, is tipped to be interested in the website and has reportedly bid £15 million through his private equity firm.
Friends Reunited claim that they have 19 million registered users, and 13 million people log onto the site at least once every 18 months… once every 18 months? Those types of figures are hardly going to strike fear in the hearts of Facebook and Twitter’s owners, nor will they do much to help Friends Reunited’s estimated value.
Peter Dubens would be well advised to leave Friends Reunited alone and let it drift away into obscurity. The website cannot attract the sort of traffic levels that Facebook enjoys and should never have been bought by ITV for such a ridiculous price.