TechnologyITV's Friends Reunited sale cleared

18th February 2010

The Competition Commission has cleared the sale of ITV’s social networking site Friends Reunited to genealogy group Brightsolid after concluding the tie up “posed no threat” to other online family tree sites.

Laura Carstensen, chairman of the inquiry group even added that the merger could “potentially benefit amateur family historians as the merged company will be better equipped to compete directly with Ancestry.co.uk, leading to more innovation and improvements in the market”.

Brightsolid runs websites findmypast.com and 911Census.com while Friends Reunited runs the successful Genes Reunited site.

ITV purchased Friends Reunited in 2005 for £170m, but sold it to Beano publisher Brightsolid for just £25m. At the time of purchase, ITV saw Friends Reunited as a key part of its push into social networking, but it was soon overtaken by sites such as Facebook, which did not charge members for a subscription.

The sale, overseen by Credit Suisse, was finalised on 6 August. At the time, execuitve chairman Michael Grade said while the £170m price tag had been “regarded at the time as a good price”, £25m was the “best price [ITV] could get”.

Brightsolid was called in to the Competition Commission on November 2 following concerns the merger could see prices rise.

But in the provisional ruling today, Carstensen said that while there was a “degree of overlap” in the activities of the two companies, “it is small and their business models are different, and in the absence of the merger would be likely to remain so”.

“After the merger another website, Ancestry.co.uk, will remain the largest supplier in this market and its presence, along with potential entry by new suppliers and the alternatives provided by free sites, will ensure that the merged company faces strong competition—preventing it from raising prices or worsening the service it provides.”

Cartensen added that the ratio of online to onsite delivery of the National Archives was roughly 200:1 over the last year, demonstrating that the internet was the most popular way to trace family roots.

The full report will be published on the competition commission website within the next few days. A final report will be published on 16 April. Parties can make written submissions by 11 March.