I was asked by Sky News yesterday morning for my views on why the social networking website Friends Reunited failed, when sites like Facebook and MySpace prospered. The reason for the question was the news yesterday that ITV had to sack 600 people after they announced they’d lost billions of pounds, some of which was on their poorly researched purchase of Friends Reunited in 2005 for £120 million.
What were they thinking?
I told Sky News how Friends Reunited was eclipsed by other, better, social networking sites because Friends Reunited tried to rely on the subscription model to provide access to your friends, whereas better competitors were offering more for free. Friends Reunited failed to act when the likes of Facebook cropped up, insisting their subscription model would work, while their members left in their droves.
Now Friends Reunited is worthless, which is considerably less than the £125 million ITV were duped out of for it.
I do wonder just who makes these decisions, and how they’re able to get £125 million to play with on an obviously bad investment.
I hope someone lost their job over that one.