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Saturday, August 08, 2009

The 50-plus, sex and genes - recipe for making money

ITV lost £150 million on its acquisition of Friends Reunited business when it sold it to a company called DC Thomson.

It was clear from start that ITV didn’t have the faintest idea what to do with the company, but I guess its seemed like a good idea at the time to buy what was then highly a successful site, enabling people to search for their school and college friends.

Having been on the site either and either made yourself feel smug about the boring life of classmates or depressed when see how well they are doing, there wasn't much more to do.

Lately, the company alighted upon the two aspects of human nature that maintain a long lasting interest – the "where did I come from" question and sex. By then it was too late and Friends Reunited was pigeon holed as a good idea at the time that never reached escape velocity to become self sustaining. Think of any of today’s social networking sites that might be going the same way?

Anyway DC Thomson, a company I had never heard of purchased the outfit for £25 million.

Why?

The headline in the Guardian answers the question: “New Friends Reunited owner plans over-50s dating website.”

Looks to me like a smart move. Thomson buys a genealogy business (it already has about 50% of the UK market in this field) that it can merge with its own and then provides dating services to the community of people that are desperate to know where their great, great grand mum was born. Brilliant.

The lessons for marketers. One, don’t acquire a company that you don’t understand and have only the most vague ideas how to grow. Two, sex and the need to know “where we came from” are fundamental drivers that can produce a commercial return. Dick Stroud

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