A Recipe for Disaster

[Just to make this easier, assume all links in this article NSFW]

I have been watching the Penthouse Media Group International (PMGI)/Various, Inc. merger since it was announced back in December 2007. Various, for those of you who don’t know, owns and operates several dating websites, includign FriendFinder.com and AdultFriendFinder.com. The merger looked a little fishy to me, as PMGI paid $500 million to acquire various. Of course, PMGI was only worth about $140 million at the time (assuming valuation at 1X revenues). Various had revenues of around $200 million, meaning that PMGI paid 2.5X top-line. That valuation is crazy. Then, PMGI announced that it was planning to go public, selling a portion of the company for a cool $250 million. This made little sense.

Now, it looks like there is some dissent at the acquired firm. It looks like the Friend Finder team is not meshing well with its new management. Reports of developer laziness, long lunches and what appear to be deliberate slowdowns. Essentially, the developers are protesting. Likely, the change in culture post-merger does not agree with them, and they are making their feelings known.

Is this at all surprising?

Top-shelf web developers tend to be a picky lot. They fight authority, and they don’t like change. They certainly don’t like being managed. But, if they are reasonably responsible and left to get their work done, they tend to put in long hours. They may take long lunches, but they’ll push well into the night. When pressed by management, though, the initiative dissipates, and they become lazy.

PMGI: welcome to Web 2.0. Old school publishing management styles need not apply.

Related Coverage:

Buy, Buy for Now, AVN Online

Target Acquired, AVN Online

What a Penthouse Media Group IPO Means, AVN Online