Show Hide image Science & Tech 10 August 2014 Friends, Reunited: the founders of the first big social network are back to try to save it The three men at the centre of the first social media phenomenon of the millenium tell the story of how Friends Reunited boomed and busted – and how it might rise again. Sign up for our weekly email * Print HTML The first social network to impact on popular consciousness (in the UK, at least) was conceived around a kitchen table in Barnet 15 years ago. Friends Reunited was hugely popular, and profitable – enough to convince ITV to buy it for £120m in 2005. The newspapers of the time were filled with stories of jilted husbands and wives blaming the site for their divorce, and at its height, in 2007, Friends Reunited claimed 55 per cent of all British adults were members. Yet few of its users were active users (unlike then-surging Facebook's), and 2007 was when growth slowed – by March 2008, when the site responded by removing its subscription fee, active user numbers had already dramatically fallen. It turned out to be difficult selling the site to a new generation of users, who weren’t growing up knowing what it meant to lose track of friends. ITV eventually sold Friends to Beano publisher DC Thomson for £25m in 2009, but a 2012 redesign was widely disliked. Longtime users fled. And while its spinoff sites – especially geneology site Genes Reunited – remain popular and profitable, it's still a surprise that Friends founders Steve Pankhurst and Jason Porter have agreed to come back after nine years, to see if there's any way to save their first big idea. I wanted to know what it was like to be the creator of a website that was a cultural phenomenon – and why they'd want to try and save it, having walked away almost a decade ago. So here, in their own words – and those of Michael Murphy, the CEO who took it from a bedroom in Barnet to a multi-million pound brand – is the story of Friends Reunited: Jason Porter: “We met working together at Bovis Construction [now Lend Lease], way back in the day. We were programmers, [but] we always had this entrepreneurial spirit, you know, always coming up with ideas, making stuff for people. We’d play around with bits and pieces, and it was really the advent of the internet that gave us the chance to try things out.” Steve Pankhurst: “We went freelance in the early 90s, but it was very boring, writing databases for insurance and pensions companies. This was when the internet was really in its first boom, so we packed that job in with the idea of trying out some internet ideas. We’d just written a big pension internet system, and I suppose we had the skills to do things. A lot of people at that time, the internet was really big and they’d say, ‘Oh I have an idea for the internet and I can make millions’. But I guess we knew how to do it.” JP: “We had enough money to pay ourselves for a year, plus 50 grand. So the idea was seven grand an idea – if it didn't work, we'd move on to the next one. One was selling children’s party bags. That was actually going quite well. Another one was a kind of dating site, a kind of precursor to the speed dating of today. And the other was Friends Reunited.” SP: “Friends Reunited one was my wife’s idea, Julie, for a number of reasons. One we’ve never gone public with, because it was a long personal story. She’d tracked down her grandfather, who she’d never met, in Denmark, using the phone system basically. And then it was quite sad, because she never met him – he died a few months before she tracked him down. It was also the idea of how the internet was going to change the world, and make finding people so important.” JP: “She was asking, ‘why haven't we got something where we can find people?’ We looked into it, and there was a site called Classmates, but they were only doing the United States.” SP: “I, quite famously, said ‘what a load of rubbish’ to it. There was an awful lot of looking back around then, with the millenium, with programmes on TV looking back at the 1980s and 1970s and school days, and there’s the idea of school reunions - they’re horrendous. But at that point, from being very sceptical, seeing that [Classmates] had thousands of users, I thought we could do it a lot simpler and a lot better. Because of jobs and babies and things like that we didn’t get around to it until the spring of 2000.” JP: “It only took us a couple of weeks to create a basic system. A lot of what we did was create complex models and databases for insurance companies, so this was a straightforward thing. We did it in Visual Basic.” The Friends Reunited homepage, shortly after launch in 2000. SP: “We were older programmers, we weren't doing fancy stuff, but we could do the backend stuff that could scale. To this day it still works, but, Jesus, sometimes you look back and think there must've been an easier way to do things. When we really took off we were contacted by Microsoft, who asked if they could see what we were doing because they didn't know how we'd done it with their own technology. But we were winging it, to be honest. We started with a blank piece of paper. No idea how to get people to use it, how to get people to find it, whether that would be search engines or guerrilla marketing or something." JP: “It was a matter of posting on message boards really. It would go up and stay there for a few minutes before getting deleted as spam. Which isn't too different to Twitter now I guess, it's there then it goes, but there were hundreds of these tiny boards with people looking for lost friends.” SP: “‘I'm looking for Joe Bloggs from King's High School in 1977’, that sort of thing. The chances of someone seeing that, it was a needle in a haystack. So I'd go on those websites – yes, you'd consider it spam these days – but I would post saying ‘I know you're looking for someone, we suggest you come to our site’. We'd launched in June or July 2000, and got one registration a day maybe. Within a month we were getting five a day, and it slowly grew.” JP: “Then there were two big things. The first [in January 2001] was Steve Wright's radio show.” SP: “Someone recommended us to the Steve Wright Show on BBC Radio 2 as the website of the day. The first we knew about it was when we got home and found that our site was down.” JP: “At that point we had one little machine and it just stopped working. We'd gone from 20 or 30 registrations a day to a thousand in a couple of hours.” SP: “We found what had happened by looking through message boards. There was one little server running the database and everything in a bedroom, a tiny ISP down the road from us, and every time thousands of people tried to access the site it died. We kept it going through the night, but it would last ten minutes, you'd have to reboot, it'd last ten minutes, and eventually we bought a second server and had to get them working together at the same time. It gave us momentum and confidence. We thought we were onto something.” JP: “There was a story in the Guardian, that was the other big thing, at about the same time. A double-page spread, and all the papers picked up on that. Around that point, it's starting to go big.” SP: “We gave up our full-time jobs – we were doing consultancy work at that point, to keep us going – but we needed to make money, so we introduced the subscription charge. Nobody was doing that at the time, it was a risk. This was March 2001. And people paid.” JP: “I'd say ‘at any moment it's got to stop’. It was starting to snowball, and we were running around trying to keep it going.” Friends Reunited went from 3,000 users at the end of 2000 to 2.5m by the end of 2001, growth was consistently rapid until the site claimed more than 20m users registered by the end of ITV's ownership – however, by then it was clear that most of those users weren't necessarily active. Of the 10m registered users still there today, less than 10 per cent use it regularly. SP: “I describe it at the best and worst time of my life. As a husband and wife team it worked well in the PR angle, from a bedroom in Barnet. With young children, it was a massive distraction. I can remember a report on the BBC Six O'Clock News, and it was very disruptive, because we were trying to feed a one-year-old baby. The cameraman was trying to film us, and the interviewer was asking the questions and feeding [Steve and Julie’s daughter] Amber at the same time because she wouldn't stop crying during the interview. I was so stressed, I couldn't believe I was in the news because of this stupid website. Then I went downstairs and we saw the biggest spike in traffic ever, and I just collapsed from exhaustion.” JP: “Initially it was just me, Steve, Julie and one other person helping us out with bits and pieces. Did that for quite a while until it got too much.” SP: “We hired our first developer at the end of 2001. We didn't grow very fast, we only had a team or four or five people, some part-time. In the end, we didn't look at the bank account, we didn't touch it, and maybe we should've looked at it, hired some people and relaxed a bit. Behind the scenes we were just working our arses off. Our biggest mistake was not delegating and getting an office - we did in the end, in Oxted in 2002, but we tried to do everything, the backend, answering 3000 emails a day, we were doing the marketing, you know, everything.” JP: “We're not managers. We don't like the big team thing. We like small teams.” SP: “I remember the New Statesman gave us an award [in 2002, the New Media Awards]. I remember going to collect it and Bamber Gascoigne was on stage with us, and it was like, what the hell is happening here? A year ago we were in the kitchen trying to make a living. I'd be making a sandwich while talking live on Five Live, you'd come off the phone and say 'that was mad'. We went on Richard & Judy, and Danny Baker's show. I got so bored of reunion stories, you couldn't go anywhere without someone telling you about their story. And there were issues that came up, like the divorce rate.” JP: “It was like really, we put him in touch with his first girlfriend? Well, what if they'd met in the pub? You'd better not let him go to the pub then. There's some funny stories about it. Although it's probably worth taking seriously if you're involved in it, if it's your husband or wife.” The team successfully launched sister sites as part of the Friends Reunited family in 2003, including Genes Reunited and Friends Reunited Dating. The company also expanded internationally with the acquisitions of Schoolfriends Australia and Findakiwi. SP: “The first time somebody came in with a tentative offer was the end of 2001, and by that point we'd kind of burned ourselves out a bit. There was a bit of belief that things might fall apart very quickly as well, so there was an element of take the money and run. But we recognised the power of our database, and we had the ideas for Genes Reunited, and the other spinoffs. The internet was going through a bit of a bust period and the valuation was quite low. The likes of Microsoft, Yahoo, even Lycos, and the new boys like Google who weren't all powerful by that time, they were all interested in us. I think they saw a chance to get something cheap, and we could get a lot more value in there. But by the end of 2002 we thought maybe it's the time to listen to people.” JP: “In 2003, we brought in a CEO in to help us out and grow again.” Michael Murphy: “I was at the Financial Times, and I tried to do a management buyout of part of the business I was a director of, but at the last minute it was withdrawn from sale. So I took two years out to find a business to buy that I could own once and for all, that I could be ultimately responsible for. The internet was very much in bust mode rather than growth, it was a terrible time, but I really loved [Friends Reunited], I thought it had a hell of a lot going for it. I phoned up Steve and Jason [in January 2003], they said ‘we really like you, we like your plans for the business, we like your style, why don't you come down and have a chat with us’. So I went down to see them on the following Monday morning, I think it was 9 o’clock in the morning, and by 10 o’clock that night Steve, Jason and myself had a deal.” SP: “We liked him, he got what we were about. We had the idea of taking a step back. We were getting into this period where, we're developers, we like doing things small and cheap, and we started getting more calls and emails from staff members from having holiday missing, and human resource issues, and accounts and lawyers, and I wasn't enjoying it any more. I wanted to try new ideas out.” MM: “I was very much the CEO, getting on and running the business, and Steve and Jason would turn up to a monthly board meeting. They weren't in the office day-to-day at all. The key successes were increasing our revenues, launching Genes Reunited and making that a success, Friends Reunited Dating was exceptionally successful as well, we bought the Australian business which did very well for us. We were able to cross-sell across the different sites very successfully.” SP: “I did find, one of the tricks of the new management team was they were all media trained. I suppose we were quite scruffy, inarticulate. We're developers. We're not good at presentations. The guys who came in had every number at their fingertips, they were slick. But building a management team built credibility as a proper business, not just two guys doing it with their wives in a bedroom in Barnet.” MM: “It was an immensely enjoyable job. When we started we had ten people, when we sold it to ITV we were up to 70. We increased our revenues substantially, particularly around advertising, we were moving at a rate of knots. Whenever a spread appeared in the Sun or Daily Mail, along the lines of ‘Friends Reunited is to blame for Britain's rising divorce rate’, our members wrote in saying you can't blame Friends for the breakup in marriages. The PR was phenomenal. It's about a million pounds' worth equivalent of PR spend, If you add up all the news stories in the paper and on TV.” SP: “It was summer of 2005 when we started the sell process. It was sparked by News Corp flooding the market with new valuations.” JP: “There were about four offers on the table on the time. MySpace had just been sold, and so all the big media companies were desperate to get into social networks. We had offers from BT, from ITV, the Mail was another one.” MM: “When we sold the business in 2005, we got a £120m in cash, and as part of the management team going forward – which Steve and Jason were not a part of – we had certain profit targets to hit. I stayed until the end of 2008, we hit all of those profit targets in full, and we got an additional £55m.” Friends Reunited's profitability didn't last, unfortunately, and by 2009 – when it was sold to DC Thomson's tech subsidiary, brightsolid – its value to ITV had dropped by £145m. JP: “Once I'd sold it, I walked away and shut the door and never logged on again. I never wanted to see what happened to it.” SP: “Amber was born on Millenium Day, 1 January 2000, and pretty quickly our lives were taken over. I think I felt a bit guilty and aggrieved for missing a bit of her upbringing, waiting so long for a child and missing it. When 2005 came around the kids were 3 and 5, they're still young enough, so my main motivation was to focus on them any way I could. My needs are pretty basic really, I'm not into flash cars, not into boats. Don't get me wrong, we've spent very wisely and had great fun, we like travelling and we've got a place down in Devon, don't want for anything, but not really into the flash side of it.” JP: “We were tired, we'd put tremendous pressure on ourselves, so a rest was quite nice. [Since then] I’ve had some different ideas I've played around with, business projects and other projects, but not internet-based.” MM: “ITV had their own priorities in what they wanted us to do. They were very much focused on the bottom line. Cash was all-important to them, so they delayed Friends going free until I think the end of 2007, early 2008. I basically helped turn it free for them, and then left not that long afterwards.” SP: “I watched from the sidelines, disappointed, but not just with Friends. It was Bebo, MySpace, there were lots of social networks killed by Facebook's domination. I had some ideas for Friends from years and year ago, and I'm not saying we could have done a Facebook, but we could have moved to more of a generic friends database than just schoolfriends. That's an opportunity we missed.” JP: “There's some things I would have done differently when ITV had it. We did fill a different niche, we did something different to Facebook, definitely Bebo, definitely MySpace. And we got to spin out other ideas, like the dating site, which is going well, the genealogy site. Basically the stuff that launched when Steve and I were running it are doing well. There's a few things I would've loved to have had a go at properly too. A jobs site, because looking around at what's there, I could do a better job than that. Estate agencies, really, industries changing because of the internet. Put it out there, see if it works, if it doesn't, move on to the next product. We had millions of ideas, a huge list, but when we were running it I think we saw ourselves as the development house to get these ideas on the internet. Very much a startup structure.” SP: “For the first five years I wasn't allowed to do anything, we had a very strict non-compete from ITV. The last three years I've really got back into it, the startup scene, Tech City, Shoreditch, I’ve been introduced to some great people. I've really enjoyed it. There's an awful lot of vacuous startups out there, but there are bright people too, you've got to find the brighter people.” MM: “There were a number of other social networking sites around [in 2006 to 2007], but none of them really threatened us at that point in time because some of them were focused on a younger audience. And then of course, Facebook came along. and obviously they've done a fantastic job and that's where they are today. [Since leaving] I've been helping founder-run businesses achieve some very nice exits. I got an MBE in the New Year's Honours List pretty much for doing that.” The 2012 rebranding of Friends Reunited as a photo album sharing site, a place for nostalgia and memories, was largely disliked by longtime users. SP: "I think it was inevitable, it was always going to decline, and it's amazing it carried on as long as it did. They pivoted it, when DC Thomson bought it they turned it into a memory picture board. The school thing became a little bit hidden away. I must admit, I thought it was brave, they spent a lot of money and time and effort on it. But it was just another version of Pinterest to me. And, unfortunately, the users voted with their feet." JP: "I was suddenly at a point where I was asking 'what's next?' And me and Steve met up, and he said DC Thompson want us to do Friends Reunited. We still have some friends we employed early on who still work there, and we'd heard people were being laid off. [The redesign] didn't go well. And we sat down and had a chat and said, 'you know what, actually, I've got some ideas', and Steve says 'I've got some ideas too'. I didn't want a big team. I basically had to get myself a computer and tools and learn how to program again. It's all been rewritten three times, and the world's moved on, you've got [programming languages] .net now, and C#, I had to learn all that." SP: "We said 'put it back to what it says on the tin, it's Friends Reunited, what's it got to do with pictures?'" JP: "I don't think it was a bad idea. I don't think it was implemented very well. I suspect they had a lot of pressure to do stuff quickly and lost lots of the features that were in the old system, like creating reunions. It's a reunion site and you can't create reunions! So it's little things like that. It's very very important, because that's the thing that drives traffic back. It's changed a hell of a lot in the last few months. I'm quietly happy with it, we're kind of close to being back to doing what it should do, so people can find their school and look at their old photos. I didn't want to shut it down beause there's a hell of a lot of good old data on there. If you go and look on your old school, it doesn't matter when it was posted, because it's a picture of you from 1992. That kind of data actually makes the backend development kinder. So in that sense it's quite interesting." SP: "I actually wanted to put the old skin back on it from 2003 and make it retro – the PR being 'it's exactly how it used to be'. The problem is, you've got a new generation who don't want to use it. It's been almost ten years, that's a whole generation. They're not going to move from Facebook to this thing. Even the ones who were 18 back in 2000 will now be 33, they'll already know how to get in touch with their friends." JP: "The target is to make Friends do what we expect it to be able to do. There's potential. We could expand into the school market more, whereby we're actually working with schools. There's a possibility we could do something like that. But probably for now, it's put it back to where it was, do these other couple of ideas we've got, and then we'll see where we are." SP: "We've got a core, older generation of customers, so number one, we'll try and stop the decline for that generation and put it back to how it was. Number two, I've got this new idea which we're working on at the moment, which is memory related. We've got ideas again, and we're trying them out. We're going to put them out and use the database to market ideas to users, and if you think about it that's what we didn't have in 2000 – it was harder work then. And then we've got DC Thompson as well, which is a great help. If anything gets traction we've got their clout to help us out this time. But at the end of the day, I'm under no illusions. It's not really a big gamble for DC Thompson or us, because we're not going anywhere, so why not let us have another shot at it? If we don't manage anything, then we've tried." JP: "We'll go for a new thing, do some prototyping, and when we're happy we'll quietly launch it somewhere, and use Friends Reunited where appropriate for marketing. We'll be done by the end of this year." SP: "I'm very pragmatic about it. If it's going to have to be switched off, I'd rather be the one to do it, you know? [laughs]." › Proms 2014: a triumphant blaze of 1930s jazz with Clare Teal's Battle of the Bands Ian Steadman is a staff science and technology writer at the New Statesman. He is on Twitter as @iansteadman. Subscribe from just £1 per issue More Related articles When it comes to social media, we all have a responsibility to avoid sharing upsetting images Extremist ads and LGBT videos: do we want YouTube to be a censor, or not? 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