In Social Media, even Adult Content doesn't pay

Soon after Bo Peabody explained why Consumer Social Media will never make much money comes news that FrienfFinder Networks has pulled its IPO - TechCrunch:

With this short statement, FriendFinder Networks has canceled its IPO plans, following a widely reported delay in trading earlier this week.

Investors are analysts were wary of the company’s plans to go public (on the New York Stock Exchange, under the symbol “FFN.”) in order to repay debt – it was reportedly paying $75 million in interest on operating profit of $45 million last year and carries a massive debt load of $471 million.

The internet holding company reported net revenue of $244.4 million in the nine months ended 30 September 2009, compared with $243.9 million in the same period a year ago. Even with this small revenue increase, filings showed sales were flat.

Its a sad day in the frothy world of Social Media when even the Adult end of it can't, er, raise anything, especially given that the FFN systems already use the Freemium model so beloved of Social Media Evangelists today. However, eyeballing the financials one can see why there may have been investor reluctance in the current climate, which is far from frothy.

FriendFinder has been going a long time, I recall looking at it in 2005 when were were analyzing designs of different Social network systems. We covered the IPO initially in 2008 over here) - one of the interesting facts from the IPO documents was that Freemium customers were c 75% of revenues and c 3% of all customers.