AdultFriendFinder has filed for an IPO | Hacker News Reader

AdultFriendFinder has filed for an IPO

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36 pointsvaksel40 comments

Reading the S1 that they filed, they (obviously) are trying to offset the debt they have through liquidation of their common stock. I can sum up the report as "we are making lots of money, have fairly significant debt, we need to move our shares now". AFF seems to be profitable and I see no reason why they shouldn't go public. While they are generating pretty impressive revenues they can also function as an umbrella in which adult oriented startups can fold into. Possibly providing further value to their shareholders. This is actually a pretty unique IPO , especially in the web sector.

I also think it will be entertaining to see AdultFriendFinder ring the NYSE bell.

The reason why they shouldn't go public : very bad timing in this volatile economy. I don't know if AFF can be categorized as startup, but startups that do not have enough cash flow (the real cash) for 2 or 3 year of expenses and etc should not go for public unless you want to get burned by short-sellers and opportunist. I work part-time in Japanese startup in my leisure time. We are only 10~ people (not all of us are developer) but already generating $4M of net income last year(not try to brag on it, since I'm sure we're not the best) and by the way we did end-year party last night I am pretty sure it's more than doubled. We choose not to raise fund or sell IPO because we feel steadier without it. Unless you have great growth that can ensure market (remember, todays market is mostly based on fear) or you have great trouble and IPO is the only thing that can save you, don't enter the market :)

The perfect index symbol for them would be NSFW.

I've always wondered how AFF can possibly maintain a number of users for long. Even average women can just walk into a bar/bookstore/coffee shop/etc. and find a man on any given night with very little effort, which means that site couldn't have much of a selection of females participating. I assume the same is largely true of gay men. So you're left with a large amount of straight men looking for women that probably aren't there.

So I could see how they could lure in a lot of straight men with the promise of casual sex, just not how they could keep the enormous churn rate down when they found they were barking up an empty tree. Maybe they just haven't burned through 100% of the population quite yet, and want to IPO so they can cash out before they do, or maybe just a lot of people have lower standards (even when sober) than I would have guessed. Or maybe AFF is nothing but a ruse to lure men into porn sites they own, since you'd probably prefer it to your options there.

Judging by the number of adultery stories I've heard here and there, I'd imagine it's a few more than we'd expect. Females seem to use it for hooking up, not for any sort of relationship, and it seems to be used especially if one is already in a relationship.

As for gay men, there are many men who hate the idea of finding a hookup or boyfriend in a bar. Gay.com has tons of users, myself included until I met my boyfriend there about two years ago. While that doesn't affect AFF's population (I haven't heard of gay people using it that much) I would imagine the same is true for straight folk.

Hmm, I would think adulterers would be less inclined to post their own picture online where it could be more easily found. Perhaps they want to get caught I suppose.

How does this "search for my spouse" work? (Our google friends aren't yet doing face recog on images. When they do, lots of interesting things will happen.)

It's not a search. I know a guy, for instance, who was married and set up an eHarmony account only to discover he was a match with his wife's best friend. And much more common I'm sure is the cheater's spouse seeing something in their email.

Not everyone posts their picture, and not everyone posts their own. Most of the time, people swap emails and that's where their real picture goes.

Is adult friend finder even a legitimate business? I have always been of the opinion that the vast majority of the ads for women are fake in order to get men to sign up. After all, why would a woman post an ad on there when she can just as easily go to, well, anywhere and find a random guy to hook up with?

Does the way people use your product determine if your business is legitimate or not? If you did much IRC back in the day then you know that no such site will need to make fake women accounts to get guys to sign up. There are enough people who get a kick out of pretending to be a girl just to prank guys.

The business masquerades as a way for men to meet women to have sex with. If all of the women are fake accounts made by employees, then I would not consider it to be a legitimate business. In fact, I might go as far as to say it's fraud, much along the same lines that shill bidding on ebay is fraud.

Did you read my comment? They would have to be incredibly stupid to make fake accounts of hot women. Enough men/ugly women would do that for them.

Yea its legit. I know from experience.

AFF has been around for a while and had been one of the first personals sites (recently they were sold to Penthouse who planned to take them to IPO).

When they were privately (and before being sold to Penthouse) they were still very profitable and paid generous bonuses to employees (although they had a fairly high churn rate due to the nature of their business). AFF, by the way, is a big Perl shop.

I believe most of their income comes from pornographic portions that they offer / affiliate programs (but I'd imagine the "adult personals" portion is what draws its audience).

A friend worked at AFF and has a curious story about it:

Once in the early day's, my friend's manager (the company's founder) had been asked by a former classmate if he could host a site for his start-up in exchange for stock options. The manager refused. That classmate's name was... Jerry Yang.

are you trying to tell me aff somehow predated yahoo? i'll file this story under "bs" and you should too

1) Is that hard to believe? Yahoo only incorporated in 1995, there were start-ups before that. Unfortunately, I can't find DNS records to back this up - FFN domains seem to be registered with non-Verisign registrar which wouldn't have been arround until 1998 (when third party registrars would have been available).

2) AFF's founders could have already been hosting sites before founding AFF (indeed, it would logically follow that he'd have experience running a site before launching a successful company).

EDIT: Here's some proof:

Conru.com is registered wih Verisign and on 03-NOV-94 (Andrew Conru is the founder of AFF and you can see the FFN address and name when doing 'whois conru.com'). Yahoo.com is registered 18-JAN-1995 (do "whois '=yahoo.com'" to check). Seems like it's at least plausible (Stanford is a small place).

Andrew Conru had several web businesses that were contemporaneous with the start of Yahoo. I worked with him for few months at W3.com (not current owner of site but a company that built websites for Egghead, New Media Magazine and others) in 94/95. It was at the start of the first dotcom era in Palo Alto. I was not involved in AFF which he started later. Conru was in the Mechanical Engineering PhD program at Stanford and could well have known the Yahoo guys.

EDIT: here is a pointer to original W3.com products http://findarticles.com/p/articles/mi_m0EIN/is_/ai_17179339

AFF is part of an umbrella organization called FriendFinderNetworks, which you will find at http://ffn.com/

Over there, you will see that the same company runs a number of age/gender/ethnicity specific networks (GayFF, AsianFF) and even a Christian dating site called "BigChurch.com" Also, the nerve.com personals section is run by fastcupid.com, which is also owned by FFN.

I think that perhaps a large part of the "ew" factor in this (and many other) threads come from the idea that enough money to warrant an IPO can come from such 'seedy' business as facilitating one-night stands, but in my mind it is quite questionable whether the vast majority of the income comes from the one-night-stand part of their business.

In fact, I am willing to bet that it is not. It seems plausible to me that the number of people who simply are not meeting a partner that meets their criteria is on par with the number of people who require one night stands.

The primary use of the proceeds from the IPO, the company says, is to pay off the nearly half billion dollars in debt on its books.

So they're only going to take money from new "investors" to pay off the old? Sounds like another Ponzi scheme to me.

Um, no? They're going to sell a part of their company to pay off their debts. But if you still don't see the difference just realize that they can only sell so many percent of their company until they have nothing left to sell and the company belongs to someone else.

I suppose it is but now they have set a new thing--when sending a message the default is set to use 100 points everytime by letting you know when the person has read the message. I once had 1564 points--now I have 864 because of the new default. I complained and they restored 200 but what about the rest? I don't care when my message is read but if I did, I would click on the box so that I WOULD know. Another way to rip you off, huh?

this is good news, i think. not that AFF, is a great business, but simply adding to the IPO count will help others do the same.

i am still of the opinion that a majority of the funds in the hedge markets had cash conserved during the down turn. if this goes well, then it will show that there is money out there.

on another note, in down times, entertainment seems to do better and this might be the only time that an adult website could grab the attention of investors.

The problem is if it crashes and burns, it turns into some sort of referendum on how IPOs are "doomed" in this economy and possibly also for quite some time in the future. I'd rather see a better company and one that doesn't carry a stigma (rightfully or wrongfully) that could prevent wide public investment be that bellwether.

Unfortunately those companies are probably staying away from even thinking IPO at this time.

I wonder how they managed to rack up $500 million in debt?

Penthouse bought AFF from the founding company for ~400mm -- if you glance at the S1:

Long-term debt classified as current due to events of default, net of unamortized discount(3) 411,019 (in thousands)

"In their report dated December 22, 2008, which is also included in this prospectus, our independent registered public accounting firm stated that events of default have occurred under certain of our debt agreements allowing noteholders to demand payment of our 2005 Notes and 2006 Notes and our subsidiary’s First Lien Senior Secured Notes, Second Lien Subordinated Secured Notes and Subordinated Convertible Notes (each as defined herein) and that these conditions raise substantial doubt about our ability to continue as a going concern."

And everyone says Sarbanes-Oxley killed the IPO market...

...if the only consumer Internet companies going public are ten years old and issuing stock to recapitalize rather than to grow their business, yes.

I once had a roommate who worked atadultfriendfinder.com. He was kind of weird. One of the types who never left his room, etc.

Why downvote this?

Truth hurts?

irrelevance hurts.

Who cares? Seriously... Adult Friend Finder? Don't even give me some crap excuse about how it's relevant because they're a startup. These guys have been in business, ripping people off since '96. Someone submitted an RFC for an avian IP network earlier today and now this. It's way too early to be posting April fools stuff.

vaksel, you really need to stop submitting everything that pops up in the TechCrunch RSS feed. I'm starting to wonder if you're some kind of sock puppet for them. It's already bad enough that we have to see any of their articles here at all. Their so-called reporting is so bad I don't even know where to begin. At least have the decency to filter out the obvious garbage like this.

having something so crappy go for an IPO is news enough for me

I don't even know how to respond to that. What are you trying to say? That this should be some kind of inspiration to readers here? There's hope that one's startup can eventually go public if AFF can do it?

A twelve-year-old casual sex meetup site is successful enough that they're going to start selling stock to the public. Stop the presses! Sex sells!

I really don't see what this has to do with hackers, entrepreneurs or HN.

I also find it somewhat ironic that you-- only a month ago-- submitted a poll asking users if they felt HN should be invitation-only in order to improve the quality of submissions.

http://news.ycombinator.com/item?id=373789

"Seems like the site is growing by leaps and bounds...and slowly losing the quality we've all grown to rely on."

Sheesh...

This is absolutely relevant to entrepreneurs and HN. This is a real web business with real revenue really going public.

Having anything go for an IPO is interesting news, at the moment.

interesting but not in the way you intend. once people watch a "sure thing" like aff flounder from its first trading day, it will indeed be a bullet-proof confirmation that this is a nuclear-winter economy...not like you need aff to confirm that. look at the previous big "sure thing" ipo, private equity group blackstone:

http://finance.yahoo.com/q/bc?s=BX&t=2y&l=on&z=m...

I definitely meant "interesting" in the broader sense.

agree their ads annoy me heaps

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