Ashley Madison Parent, Under FTC Investigation, Launches Turnaround Plans
Ashley Madison Parent, Under FTC Investigation, Launches Turnaround Plans
Infidelity website names CEO as it looks to rebrand itself after being hit by data breach last year
Infidelity dating site Ashley Madison recently named Rob Segal, right, as chief executive and James Millership as president. PHOTO:REUTERS
By
MARIA ARMENTAL and
AUSTEN HUFFORD
Updated July 5, 2016 7:47 p.m. ET
Avid Life Media Inc., parent company of infidelity website Ashley Madison, on Tuesday said the Federal Trade Commission is investigating its business practices.
Ashley Madison—which bills itself as “the online personals & dating destination for casual encounters, married dating, discreet encounters and extramarital affairs”—was thrust in the spotlight last year when cybercriminals posted online stolen customer information, including customers’ credit-card details, addresses and sexual preferences.
Tuesday’s disclosure, along with the first public announcement of its new executive team, comes as the Canadian company seeks to rebrand itself beyond the infidelity moniker, investing “millions of dollars” in technology and security, including new “secure and discreet payment options” to build “the world’s most open-minded and discreet dating community.”
Reached by telephone on Tuesday, Chief Executive Rob Segal and President James Millership said the Federal Trade Commission, the chief federal agency in the U.S. on privacy policy and enforcement, had contacted the Canadian company last summer.
Messrs. Segal and Millership wouldn’t comment on what information was requested beyond confirming that they were sharing information with investigators. The FTC couldn’t be reached for comment after regular business hours.
Asked of other investigative requests beyond the FTC, Mr. Millership said: “We are working and collaborating with any group that has reached out to us.”
The two executives, who joined the privately held company in April, said a report commissioned by the company’s board to look into past business practices confirmed that fembots, computer programs that disguise themselves as female customers to lure men to the site, were no longer being used. The company, Messrs. Segal and Millership said, stopped using the bots in 2014 in North America and in 2015 elsewhere.
From the Archives
Hackers say they will make personal details of more than 37 million users public unless the adultery site is shut down. Photo: AshleyMadison.com (Originally published July 20, 2015)
The no-bot policy, Mr. Millership said, “was a fundamental requirement for both Rob and I” in taking on the management roles.
Mr. Segal founded Segal Communications, which was later acquired by advertising firm Interpublic Group of Cos., while Mr. Millership worked as chief financial officer and chief operating officer of online gaming platform WorldGaming, bought last year by entertainment company Cineplex.
The executives said the company, which had annual revenues of $109 million before the hack, expects to close the year with about $80 million in revenue. Meanwhile, a key metric that looks at profit margins before certain costs such as interest and taxes, is expected to narrow from about 49% before the hack to 35% to 40%.
Still, they said, membership has held up, from more than 40 million members before the hack to the current 46 million members from 46 countries, with the core of membership coming from the U.S., Canada, the U.K. and Australia.
A new marketing approach is in the works, they said, declining to elaborate further.
“We want to serve the needs of our customer base,” Mr. Segal said, adding, “We think that approach may be a little different than in 2010.
http://www.wsj.com/articles/ashley-madison-parent-appoints-new-ceo-1467718157
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Oh boys - it's time to re-up memberships. There's a new marketing approach in the works. No more fembots!
At times like this we must turn to the wisdom of our elders
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Pat Robertson's tells woman whose husband cheated to remember that "he's a man" and to be grateful that she lives in America