ITV considers further job cuts and Friends Reunited sale

ITV is considering cutting around 500 jobs as well as selling its Friends Reunited social networking site, which has seen its value plummet since it was bought, as part of wider cost-saving plans by the broadcaster.

Michael Grade, the ITV executive chairman, is looking at the sale of Friends Reunited as part of a review being led by chief operating officer John Cresswell ahead of the company's annual results, which are due on March 4.

When it announces its results, ITV is likely to reveal a fall in advertising revenues, expected to be between 9% and 10%, and hundreds of job cuts. These will come on top of those announced in September when the broadcaster said it planned to reduce its staff by around 1,000 or 17% of its workforce by early this year.

Last week ITV said it was freezing the pay of all staff earning more than £60,000, including executive chairman Michael Grade and managing director of ITV brand and commercial operations Rupert Howell.

Last month ITV was reported to be writing down the value of Friends Reunited, the online business that it bought in December 2005 for £175m.

Friends Reunited has grown considerably since ITV bought it and changed its business model by dropping the subscription fee in favour of pursuing advertising revenue on the site.

ITV originally paid for Friends Reunited with £120m in cash upfront and a further £55m under the terms of the management team's three-year earn-out deal, the final instalment of which is believed to have been paid in recent weeks.

The sale of Friends Reunited, which reconnects old school and college friends, would see ITV focus its online efforts on its main website.

The development follows the Competition Commission's decision to axe ITV's proposed online TV joint venture, Kangaroo, which it had been planning with Channel 4 and the BBC.

Friends Reunited is not the only ITV asset on the block. Last week it was reported to be looking at a sale of its news division ITN, which risks being sold if new investors cannot be found.

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