VentureBeat

We reported last week that AdultFriendFinder, the second most traffiked adult site on the Web, is negotiating to be sold to Penthouse for a price between $500 million and $1 billion.

At the time, we cited a source explaining why the company was seeking to sell itself for a relatively low price, considering the company has $300 million in revenue and $100 million in earnings (EBITA). The industry is going through significant change, with user-generated content and other, more interactive technologies forcing older sites to adapt. Essentially, AdultFriendFinder finds itself with stagnant growth. We hesitate to point to Alexa data, because it is somewhat unreliable. But the traffic measurement companies with more accurate data — Hitwise and Comscore — won’t furnish precise traffic data on the company, citing their policies not to track adult sites. But at least the Alexa data does show how traffic is flat (see below), and this reflects what is being internally at AdultFriendFinder, according to our source. AdultfriendFinder was the second most visited Adult website in the U.S. for the week ending Nov. 23, says Hitwise. But the site’s traffic was down 6 percent last week, compared to the same week last year, again according to Hitwise.

While its traffic if flat, however, in the right hands, the site could be quite lucrative. There’s a huge amount of demand in this sector (some estimates have put it at $50 billion), and it’s not going to go away.

Next Story: Carbylan raises $20M for arthritis, sinusitis drug implants
Previous Story: CARMA, where anyone can see the sources of greenhouse gases