Penthouse acquires Adult Friend Finder

While the influx of free and low-cost video has hurt the sale of pornographic videos, the chief executive of the Penthouse Media Group remains so bullish on the sex-related entertainment industry that he is investing $500 million in a group of social networking sites.

Marc H. Bell, chief executive of Penthouse Media, said the company had acquired Various Inc. and its subsidiaries as part of a plan to expand its reach. Various operates more than 25 networking sites and says it has a member base of more than 260 million consumers, about 1.2 million of them paying subscribers.

Ny Times link here (Thanks Gregg).

As I’ve said before, AFF’s growth has been fueled by the aggressive use of shady affiliate marketing. With high payouts to affiliates, aggressive pornographic creative materials (including video porn ads) and an apparent blind eye to the gross practices of slimey affiliates (including fake pages on MySpace, advertising in malware, etc.), the company has grown rapidly.

I can only hope that Penthouse understands what it’s getting into, including the fact that it’s unknown whether or not the AFF’s high growth can continue with the FTC’s oversight on its practices.