Penthouse Turned On by AdultFriendFinder.com - $500 Million Splurge Confirmed

The news is in (and no, Jenna Jameson is not coming out with a new flick) and the price has been confirmed - Penthouse has forked over $500 million in the acquisition of AdultFriendFinder.com. Sounds like a rob at the bank for Penthouse - but as the online porn industry continues to grow, what does the future hold for these adult websites and how does the popularity and market saturation of these adult sites affect the industry? More and more investors are dumping millions into porn and adult-related start-up social networks because these sites have historically shown tremendous growth and returns, but with so many sprouting up I wonder who’s going to take the lead in the adult site market and which ones will crash and burn?

I did a little trend analysis to just see where this industry has been in the last few years and where the trends are pointing to in the future. According to Google Trends, the volume for search for the “adult website” keyword has significantly dropped since 2004-2005.

Adult Website

Makes me wonder - have the search terms changed since 2004? Are there different keywords that visitors are using to find online porn and adult websites? So I did another search for the keyword “online porn” and again the search volume is nowhere where it used to be back in 2006. So what does that mean? Is it smart to get involved in a start-up adult website or is it wiser to join forces with a huge porn conglomerate like Penthouse? Maybe that’s what AdultFriendFinder was thinking. Maybe that’s why the price for acquisition was so relatively “low”. The search volume for “Adult Friend Finder” also showed a significant dip in 2007 compared to the highest reached peak back in 2006.

AdultFriendFinder

I realized that my data was only coming from one source so just for kicks I decided to do some digging in Alexa and here’s what I found for AdultFriendFinder.com’s daily traffic rank trend for the past 3 years:

So the Alexa rank for AdultFriendFinder has significantly decreased in 2007 compared to ‘05 and ‘06. But why?

After doing the 20 minutes of research (and I know there is way more out there than what I dug up) I conclude that the acquisition was probably a good thing for AdultFriendFinder’s sake. The company will have a HUGE budget for marketing and other business development opportunities under Penthouse’s ruling - hence, we’re not going to see the fall of AdultFriendFinder anytime soon.

And even though the search volume trends for general adult website or other porn related social networks are down - maybe brand affinity is extremely powerful in this industry. Perhaps, more and more visitors are remembering their favorite adult websites and don’t Google search the general terms anymore. Maybe that’s why the general keyword trends are showing a downslope, because I don’t see the porn industry slowing anytime soon…