Peter Kafka

Recent Posts by Peter Kafka

Are Investors Finally Ready for an Internet Porn IPO?

adult-friendfinderIs this the year we finally see Internet companies trying to go public again? There are a lot of folks rooting for an IPO from the likes of Facebook, LinkedIn or even Zynga. And I’m one of them, if only because it would give me lots of interesting stories to write.

In the meantime, if you’ve got a voyeuristic itch to scratch, public offering-wise, there’s still FriendFinder Networks. The money-losing collection of porn sites and social networks announced its IPO a year ago but never pulled the trigger.

FriendFinder still wants to, though. The company has updated its filings with the Securities and Exchange Commission (via PaidContent) and is now looking to raise $220 million, down from the $460 million it was looking for a year ago. It still wants to do the same thing with the cash: Pay off lenders.

Interested in getting in? You can read the new S-1 filing or this very quick version: FriendFinder’s subscriber base has shrunk just a bit, but net revenue has held steady–it brought in some $244 million in the first nine months of last year.

The company’s pitch is that it is throwing off a lot of cash–FriendFinder reported $45 million in income from operations in the first nine months of last year–and that things will get better once it can pay off its debt and stop making huge interest payments (it spent $75.3 million on interest during that same period).

FriendFinder’s model, meanwhile, still revolves around paying other Web sites a lot of money to promote its own sites and bring in new subscribers. (More on its “freemium” model here–worth paying attention to in light of Zynga’s go-go growth.)

Oh, and the company has yet to sell the Ferrari 360 Modena it bought from its founder for $125,000 in 2006. FriendFinder says the car still has a “net realizable value” of $95,000.

ferrari-modena-florida


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