Penthouse Media Group has acquired adult-oriented social network operator Various Inc. for $500 million, NYT (FRB: 066570) reports. Various runs more than 25 social net sites under its flagship site FriendFinder.com  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 adult dating 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.
The combined revenue of both companies is projected to be $340 million in 2007. Various’s most popular Web site is adultfriendfinder, which describes itself as a personals community for swingers  and sex. But Various owns a variety of other social networks  like Italianfriendfinder.com, gradfinder.com and bigchurch.com, which offers to help users “meet people who share the same spiritual beliefs as you.”
“For now, we are holding on to everything,” Mr. Bell said. He said the goal was to provide consumers, particularly 18-to-34-year-old men, with a wide variety of sex-related offerings in magazines, in videos and online.
“The rationale here is, it’s an online world,” Mr. Bell said.
After filing for bankruptcy protection, Penthouse was purchased in 2004 by PET Capital Partners, a group of private investors that includes Mr. Bell. Since then, Mr. Bell and his team have revamped the magazine, turning it from what he describes as an “XXX” publication into a more lifestyle-focused magazine that is “where you go when you graduate from Maxim.” The company also started making sex-related movies aimed at couples.

By ANDREW MARTIN, www.nytimes.com