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December 14, 2007

Penthouse Makes $500M Hookup with Social Site Various

By Raju Shanbhag, TMCnet Contributing Editor

The Adult Entertainment industry is a big business in the Internet — and you cannot expect them to be unaware of the latest developments and trends in the Internet, to not take advantage of them. Catching up with the latest online trend of major corporations investing in social networking, Penthouse magazine has reportedly paid $500 million for a Silicon Valley company running one of the biggest sexually oriented social networking Web sites.



 
The deal is for Palo Alto (News - Alert), California-based Various’ AdultFriendFinder site, which will be added to Penthouse’s portfolio as it expands further into the growing field of social networks led by MySpace (News - Alert) and Facebook.
 
The adult entertainment industry is worth $13 billion. The competition is stiff, and recently, the industry has witnessed a plunge in DVD sales, and is now looking for new avenues to increase revenue. Penthouse, itself, is looking to as many adult-focused companies as possible as it looks to go public.
 
For industry analysts, this deal is the biggest ever in this arena, saying it signifies the shift of adult entertainment industry from traditional media to new wave media. With the investment in Various, Penthouse expects revenue of $340 million this year, making it the world’s biggest adult-entertainment company. This is a direct challenge to the Playboy,  currently the biggest name in the adult entertainment industry.
 
But, according to a report in USAToday, Playboy is not overly concerned about the deal, as it thinks the two companies are operating in different markets. Headed by CEO Christie Hefner, Playboy is slowly diversifying into in to non-sexual businesses, such as household products and shower curtains. The company has also come with PlayboyU, a new social network for college students.
 
AdultFriendFinder claims it has 260 million registered users and more than 1.2 million monthly subscribers. AdultFriendFinder subscribers pay up to $50 a month.
 
Raju Shanbhag is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
 
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers whitepapers, case studies and other documents which are free to registered users.
 
Today’s featured White Paper (News - Alert) is titled VoIP Doesn’t Require Any Phone Equipment Investment, brought to you by Accessline.







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