Friend Finder Networks is an American internet company founded in 1996 by Andrew Conru. Its corporate headquarters are located in Boca Raton, Florida, with additional offices in California, New York, and Taiwan. The company primarily deals in adult entertainment, online dating, and social networking services. Its flagship online dating services include FriendFinder and its various spin-off services, as well as niche websites for alternative lifestyles, and adult webcam websites. In 2007, the company was acquired by the owners of Penthouse magazine, and adopted its current name. In 2016, the Penthouse brand was sold off.
History
FriendFinder was launched in 1996 by Andrew Conru. After discovering that users had been using the service to seek sexual partners, he launched Adult FriendFinder as a spin-off, followed later by other spin-offs dealing with different regions and niches. Much of the company's growth without investment capital has been attributed to its affiliate program, with more than 500,000 affiliates to date. In 2007, Penthouse Media Group purchased FriendFinder's parent company, Various, Inc., for $500 million. Penthouse later changed its name to FriendFinder Networks. In 2008, the company filed for a $460 million initial public offering. Most of the money generated was to pay down $420.1 million in short-term debt and other obligations. As of January 17, 2010, FriendFinder Networks had a negative net worth equal to $118 million, $32 million in cash on hand and $650 million in liabilities. The company had also indicated that it lacked existing cash or cash from operations to repay a $44.5 million debt that was due July 31. It has cautioned that, unless it can repay or restructure its obligation, it will face “a material deficiency in our short term liquidity.” With these shortfalls in mind, the company again announced an intention to make an initial public offering of stock, representing a 49% stake in the company, with plans to use the proceeds to pay down its debt and become listed on the New York Stock Exchange. The contemplated public offering, scheduled to reach the market on January 27, 2010 was delayed by FFN. On February 5, 2010, FFN announced its intention to indefinitely delay its contemplated IPO until market conditions improve. In June 2010, FriendFinder Networks made a $210 million bid to acquire Playboy Enterprises. Hugh Hefner, who owned 70 percent of the voting stock, did not want to sell.
Bankruptcy, reorganization
In August 2013, FriendFinder was delisted from the NASDAQ because its stock had not traded for more than $1. On September 16, 2013, the company filed for Chapter 11 bankruptcy protection. FriendFinder had not turned a net profit since at least 2008. Ezra Shashoua, the company's chief financial officer, blamed the lower revenue on a drop in membership and increased advertising costs for affiliates, according to court documents. Shashoua also said credit card companies had refused to process transactions for the company's Internet businesses. The company stated it had negotiated a deal with noteholders that would reduce its debt by $300 million. In December 2013, FriendFinder Networks' reorganization plan won court approval by the U.S. Bankruptcy Court in Delaware. Founder Andrew Conru, was named as the reorganized company's chairman and CEO. In February 2016, FriendFinder Networks sold the rights to the Penthouse brand to Penthouse Global Media, a new company formed by the brand's managing director Kelly Holland.
Security breach
On November 13, 2016, it was reported that a database of over 412 million accounts, including usernames, e-mails, and passwords, had been breached and leaked from several FriendFinder Networks websites. The breach included account data from Adult FriendFinder, Cams.com, and Penthouse, including accounts that had supposedly been deleted. The passwords were either stored as plain text or encrypted using the obsolete and insecure SHA-1 cipher.
