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Social Networking - Wednesday, December 12, 2007

Penthouse Seduces AdultFriendfinder With $500M Buyout

A few years back we worked out of a non-descript Palo Alto office. Our neighbor tenants went by Various Inc. and were a suspicious looking bunch. Word spread that they were making huge coin operating hook-up sites like AdultFriendfinder.

Following a couple weeks of rumors, Various Inc. has confirmed that it will fold into the Penthouse with Various Inc. accepting a $500M check. Various never took venture funding so its founder Andrew Conru will enjoy most of that windfall.

Various operates more than 25 social networking sites and says it has a member base of more than 260M and about 1.2M paying subscribers. The combined revenue of both companies is projected to be $340M in 2007.

Given the growth of Various Inc. it would not be a stretch to see it buying a print publication like Penthouse rather than the other way around - especially as Penthouse filed for bankruptcy a few years back. However, Penthouse was bought by private equity firm PET Capital Partners that has the deep pockets to write checks to buy both Penthouse and Various Inc.

We have seen Conru speak and find him to be an impressive guy. We expect him to continue to be a powerhouse on the Net. In addition to Various Inc. Conru runs ConfirmID.com (3rd-party personal info verification service), GuanXi.com (Chinese business networking), HelpCrew.com (remote customer service) and Dine.com (online restaurant reviews). He previously founded website development pioneer Internet Media Services in 1993, Internet advertising pioneer Focalink Communications/AdKnowledge in 1995 (which was sold to Engage and CMGi in 2000), online personals pioneer WebPersonals.com in 1994, and website personalization software pioneer W3, Inc in 1995.