FriendFinder Networks (FFN), an online adult social networking and multimedia entertainment company, is expected to go public this week. According to the WSJ:
It describes itself as a leading "social networking and multimedia entertainment company," and in prerecorded roadshows compares itself with privately held Facebook Inc. and MySpace, owned by News Corp., publisher of The Wall Street Journal. But FriendFinder differs from both: Members on Facebook and MySpace tend to keep their clothes on, while several of FriendFinder's sites encourage the opposite.
Business Overview (from prospectus)
We are a leading internet-based social networking and multimedia entertainment company operating several of the most heavily visited social networking websites in the world. Through our extensive network of websites, since our inception, we have built a base of over 365 million registrants and over 245 million members in over 170 countries, with a majority of our members outside of the United States, offering a wide variety of online services so that our members can interact with each other and access the content available on our websites. Our websites are intended to appeal to users of diverse cultures and interest groups and include social networking, live interactive video and premium content websites. Our most heavily visited websites include AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com, Cams.com, FriendFinder.com, BigChurch.com and SeniorFriendFinder.com. Our revenue to date has been primarily derived from subscription and paid-usage adult-oriented products and services. We believe that our broad and diverse user base also represents a valuable asset that will provide opportunities for us to offer targeted online advertising to specific demographic groups. In addition to our online products and services, we also produce and distribute original pictorial and video content, license the globally-recognized Penthouse brand to a variety of consumer product companies and entertainment venues and publish branded men’s lifestyle magazines.
Offering: 20 million shares at $10-$12 per share. Net proceeds of approximately $200.1 million will be used to repay debt.
Lead Underwriters: RenCap Securities, Ledgemont Capital Group, Merriman Curhan Ford
Net revenue for the nine months ended September 30, 2009 and 2008 was $244.4 million and $243.9 million, respectively, representing an increase of $0.5 million or 0.2%. Internet revenue for the nine months ended September 30, 2009 and 2008 was $228.7 million and $225.2 million, respectively, representing an increase of $3.5 million or 1.6%... Cost of revenue for the nine months ended September 30, 2009 and 2008 was $68.7 million and $73.3 million, respectively, representing a decrease of $4.6 million or 6.3%... Net loss for the nine months ended September 30, 2009 and 2008 was $27.4 million and $32.3 million, representing a decrease of $4.9 million or 15.2%.
Social Networking Websites — Unlike most other social networking websites which are free, we have a paid subscription-based business model, which we believe is a significant competitive advantage. Our adult-themed community websites from which the majority of our revenue and earnings are derived, including AdultFriendFinder.com, do not directly compete with other general interest social networking websites because of the adult nature of the content. Our general audience websites, which contribute substantially less of our revenue and earnings, compete with other companies offering social networking websites such as MySpace (NWS), Inc., Facebook, Inc. and Friendster, Inc. Our general audience websites provide a wide range of social networking tools including blogs, chatrooms and messaging similar to our competitors. We also believe that a significant advantage to our websites is the ease with which members meet other members who were not known to them prior to joining our network.
- Company website
- Online road show
- AP: 'Investors May Be Cautious on Racy FriendFinder IPO'
- WSJ: 'Behind FriendFinder IPO: Risqué Business'
- Media Tech Analyst: 'Is FriendFinder Networks' IPO Filing a Significant Sign of Recovery?'
- Michael Arrington: 'Lookee Here: An IPO Filing!'
- Tate Dwinnell: 'FriendFinder Networks Files IPO in Desperation'