Sex sells, and sex site may be sold for $1B

TechCrunch reported last week that Penthouse Media Group, publishers of Penthouse magazine, may have agreed to pay $1 billion to acquire Palo Alto, Calif.-based Various Inc., an operator of sex-social networking sites, such as AdultFriendFinder. The sale price is more than 3x the $300 million that the company reportedly earns in annual revenue, and may be the largest sale price ever for a consumer Internet company that never raised a dime of venture capital funding.

Founder and CEO Andrew Conru told, in a March 2007 story, that while most Internet sites take in venture capital, he grew his current business organically, in part because the VCs didn’t want to have anything to do with the sexual content on his site. Conru also said that he had distaste for institutional backing since he’d taken funding for an earlier startup and wound up disappointed with his cut.

“When you start out, you don’t need a lot of money, as the Web 2.0 crowd finally figured out. All I really needed was a computer,” he said. —Dan Primack