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News Analysis: DC Thomson's acquisition of Friends Reunited

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By The Drum Team, Editorial

August 6, 2009 | 4 min read

The Drum spoke to several social media experts to discuss the surprise acquisition of Friends Reunited by DC Thomson.

What might raise more eyebrows still is that fact that any business would want to purchase Friends Reunited - the ailing pioneer of social media.

That ITV has lost £150m since buying Friends Reunited in 2005 for £175m, during which time the brand has faded behind digital upstarts such as Bebo, Facebook, Myspace and now Twitter, which have grown to become global online giants, tells a tale of its own.

Kyle McCrae of Blether Media, a social media consultancy, claims that he spoke to co-founder of Friends Reunited, Steve Pankhurst following the sale to ITV. Pankhurst recognised that he had been ‘very very lucky’ to have had such a good idea and, perhaps even more lucky to have sold when he did.

“It was a fantastic idea, way ahead of its time, but once you had made contact with your old friends, what did it offer?,” asks McCrae. “Once you had swapped email addresses with friends, would you bother renewing your subscription? For the first three years, it made sense to be a member, simply because it was growing so quickly and new people were joining all the time. But the moment you realised you were unlikely to find anybody new – the moment growth plateaued – the incentive to pay vanished. The job was done. There simply weren't, and aren't, enough 'sticky' features to keep people using the service for its own sake.”

So the question is, why has DC Thomson taken such an expensive (despite shaving £150m off ITV's purchase price), and curious step in buying what many in digital believe is entering redundancy?

Iain S Bruce, director of social media & online PR experts Revolver PR, owned by Bigmouthmedia, believes that while the publisher has been slow to come to terms with digital media, it is now making ‘a determined effort’ to make up for lost time through Brightsolid.

“They may have bought a flagging brand, but it’s one with a massive user base and a highly recognisable name. If they can give the site the love and attention that ITV so manifestly failed to supply, this could well turn out to be a real bargain buy.”

It’s understood that social networking arm of Friends Reunited became its least profitable feature and indeed saw it lose members when it began to charge for extra membership services and benefits. The service was dropped last year.

Joe Hughes, research & insight manager for social media agency Yomego, who previously worked at STV where he saw firsthand how ITV looked to develop Friend’s Reunited, says that he can see several reasons for the buyout but believes if DC Thomson has bought the company to revitalise it, then it has made a mistake.

“As a brand it’s gone. I can’t see how, without an enormous investment both in terms of brand versioning and also in terms of marketing around the platform, they can revitalise it as a brand.”

Hughes does say that DC Thomson’s attraction is likely to lie with Genes Reunited as it looks to tie that in its own genealogical site Find My Past. As well as this he says that the technology and those working for the brand, who have the rare experience of working for a large-scale social media brand, also come with a value.

“I can see some of its technology possibly being useful for DC Thomsons regional titles, using some of Friend’s Reunited’s technology to build lots of local community websites through social networking tied with DC Thomson’s newspaper outfit. That might be a way for the company’s local newspaper titles surviving but they could have done that a hell of a lot cheaper than £25million.”

Whatever DC Thomson’s plans, ITV will be relieved to have finally offloaded the brand, even at such a high cost.

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