ITV offloads Friends Reunited as it unveils £105m loss

Author: By Kelly Macnamara, Press Association

The broadcaster said it had agreed to sell the social networking site to DC
Thomson, publisher of the Beano and the Dundee Courier, for £25 million.

ITV, which bought Friends Reunited for £120 million in 2005, said the deal was
subject to approval by the competition authorities.

DC Thomson said the acquisition of Friends Reunited would create Britain’s
leading genealogy business by bringing together the Genes Reunited site and
findmypast.com. These sites operate the official 1901 and 1911 Census
websites respectively in association with The National Archives.

Friends Reunited, which has 20.6 million members, was launched in 2000. Genes
Reunited was launched in 2003 and has 9 million members worldwide and over
500 million names listed.

Friends Reunited has suffered in recent years as rival social networking sites
like Facebook, Bebo and MySpace emerged on the scene.

ITV today revealed that television advertising across the market suffered its
worst year-on-year decline on record during the six months to June 30.

The firm said its net television advertising revenue (NAR) fell by 15 per
cent, or £108 million, but said this was better than the overall market
decline of 17 per cent.

It also said there were signs that the advertising slump was moderating in the
second half, with revenues predicted to be down 12 per cent in the third
quarter and 7 per cent by the end of the year.

John Cresswell, ITV chief operating officer, said it was important to see the
firm through the “pretty severe ad recession” without damaging its
long-term value.

He told BBC Radio 4’s Today programme: “We are a cyclical business and we
are amid the depths of a pretty deep cycle but what we have to do in that is
adjust our spending and our investment to make sure that the business can be
strong going forward.

“We’ve got three principle businesses – obviously the broadcasting, our
viewing shares held flat in a fragmenting world for the third year running
which we’re very pleased about.

“We’re taking advertising share from our competitors. Our content
business … is showing good growth in revenue, certainly in the first half,
and online video is growing very quickly as well.”

ITV made a statutory £1.54 billion loss last year after it was forced to write
off £1.6 billion of goodwill associated with acquisitions made in 2000 and
2004 because of reduced advertising forecasts.

Executive chairman Michael Grade said: “Our financial results for the
half year reflect the impact of the unprecedented downturn in television
advertising, offset by the comprehensive action we are taking in mitigation.

“The rate of market decline has eased slightly in the second half and ITV
continues to outperform the market.”

He said the fact that ITV had attracted more advertising than the market as a
whole was a testament to its programming.

Mr Grade added that the broadcaster had managed to retain its audience share
for the first time in 25 years.

ITV said its top-performing shows included the drama Whitechapel and Harry
Hill’s TV Burp.

Britain’s Got Talent was the highest-rating non-sports programme on UK
television in six years and enjoyed peak audience numbers of nearly 20
million.

I’m A Celebrity, with spin-offs in the US and a German version entitled Ich
Bin Ein Star, has generated more than £150 million in cumulative lifetime
revenues.

ITV said it had reduced costs by £57 million in the first half of the year and
was on track to deliver at least £155 million in savings this year and £215
million in 2010.

The firm said it had announced the majority of the job cuts planned and, after
a consultation, all those affected – over 1,000 – were aware of their
position.

“We have no current plans for more, although you can never rule it out,”
the firm said.

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