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Industry Moves: Friends Reunited Top Trio To Step Aside In Shake-Up

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ITV (LSE: ITV) is restructuring the original top tier of its Friends Reunited site, which relaunched last month with a new social network feel and dropped premium subs in favour of ad funding. CEO Michael Murphy is stepping back to the board to become a non-executive director, while marketing director Tim Ward is moving to ITV Consumer more generally and financial director Rob Mogford will step aside at year’s end. Guardian says they’re going after reaping the final tranche of a £55 million earn-out that came with ITV’s £120 million acquisition in 2005. In Murphy’s place as managing director comes Trinity Mirror (LSE: TNI) digital recruitment director Andy Baker (pictured).

This seems to signal a changing of the guard from subscription fees diehards to the free-site regime. Murphy, who had previously introduced premium fees to FT.com as the online paper’s COO, wrote of the same decision by Friends Reunited in 2001: “When they set up the site, Steve and Julie (Pankhurst) had not realised its full potential. They had hoped to get an income from companies advertising on the site but this simply did not work. So they reluctantly introduced a charge for people wanting to contact old friends through the site.”

Though it has posted tidy numbers, making up two-thirds of ITV’s £33 million 2007 online revenue, Friends has been overtaken by true and open-access social networks. Under its turnaround plan, ITV aims to reach £150 million from online by 2010 (75 percent from display, video and classified ads) – but, in ditching paid access, it’s just sacrificed its biggest cash cow and it goes in to the ad-funded content game ahead of a possible advertising recession. It’s also nowhere near the target at present.