MTG buys Swedish internet community

Modern Times Group, MTG AB, said it has acquired 90 percent of the share capital in Swedish online social networking community '' for 102 million kronor in cash.

MTG will pay for the shares on a deferred basis over two years, with an initial payment of 70 million kronor payable immediately.

Playahead is Sweden’s second largest internet community, with over 530,000 members. In the 9 months to Sept 2006 it reported sales in Sweden of 18.2 million kronor, up 50 percent on the same period a year earlier, and an underlying operating

profit of 6.4 million kronor, up 77 percent year-on-year.

Besides Sweden Playahead has operations in Denmark, Norway and the UK.

The web community mainly consists of 14 to 25 year-olds who last year sent 220 million messages and 13 million photos over the site.

The site generates revenues from membership subscription fees and advertising, as well as online product sales.

“Playahead is one of the most popular, creative and exciting on-line community brands in Scandinavia, and is a favourite destination for the young people who watch our channels, listen to our stations,” said MTG CEO Hans-Holger Albrecht, “Studies show that 12-24 year-olds spend as much as a third of their media consuming time on the internet”.

Albrecht said internet advertising is forecast to deliver ‘high double digit growth’ over the coming years in Scandinavia, and even higher levels of growth in the Eastern European markets.

The acquisition will give MTG the opportunity to grow in this expanding market.

“Playahead not only gives us the opportunity to reach out to more of our target audience group, but also enables us to build on a well developed and diversified internet platform,” said Albrecht.

MTG will consolidate the results of Playahead into its Viasat Broadcasting business area from today.