ABS-CBN acquires 5% stake in Multiply

Philippines-based broadcaster ABS-CBN has acquired a 5% stake in US social network Multiply for USD5m.

Under the terms of the agreement, ABS-CBN purchased 2,524,448 shares in Multiply for USD1.98 per share. ABS-CBN also has the right to purchase up to 10% of Multiply within the next two years.

The move underlines the importance of Asian markets for Multiply, which derives most of its traffic from overseas even though the bulk of its 7m registered users are in the US. The Philippines is one of the network's strongest markets, as the country accounts for about 39% of its traffic, while Multiply is the Philippines' fifth most visited website with more than 2m unique monthly visitors, according to web infor firm Alexa.

ABS-CBN interactive head Paolo Pineda says he has "long-term plans" for multiply, including more internet advertising and a mobile version of the site for users in the Philippines. The deal complements ABS-CBN's portfolio because both companies generate their own content, he adds.

"Multiply... is the social network that is most consistent to our business model because they have focused on photo, video and blog features compared to the other social networks such as Friendster and Facebook, which focus on connecting friends and running applications," he says. "This puts together content and communities around the content, whether it is ABS-CBN-branded or user-generated."

The acquisition is a continuation of a partnership between the two firms, as ABS-CBN already sells advertising and mobile service to Multiply users in the Philippines.

Launched in 2003, Multiply encourages members to share items such as digital photo albums, blogs and calendar events with online friends. The network has 9m members and backers include VantagePoint Venture Partners, Point Judith Capital and Transcosmos.

According to TechCrunch, the deal with Multiply values the network at around USD100m.