Hefner fights Penthouse for control of Playboy

Octogenarian porn baron Hugh Hefner, still hoping to buy back his struggling Playboy empire, now faces a rival bid for the magazine from the owners of Penthouse. Marc Bell, chief exec of FriendFinder Networks, revealed last night he was working on a rival offer for Playboy's "great brand".

Hefner first published Playboy in 1953 and owned the magazine outright until the year 2000 when Playboy Enterprises went public. Now aged 84, he retains 70 per cent of Playboy’s  'Class A' stock and 20 of its 'Class B' shares but announced on Monday he has teamed up with a private equity group to buy all the stock, valuing it at $5.50 per share.

There is more than just the magazine at stake here: Playboy Enterprises also produces television, websites and licenses its famous bunny logo for use on products. Hours after Hefner made his bid public, FriendFinder stepped into the fray, raising the intriguing prospect of a battle for control of the rabbit ears.

A takeover by Penthouse's publisher would be particularly galling for Hefner: Playboy and Penthouse are old enemies, for many decades each other’s closest rival in sales. But, founded in the UK in 1965, Penthouse, has always pitched itself as a lower-brow version of Hefner’s pride and joy.

Penthouse never shared the older magazine's literary pretensions (in his seventies heyday, Hefner published new writing by Saul Bellow, Joyce Carol Oates, Vladimir Nabokov and many others in the magazine) and has always been more anatomically explicit than Playboy. In the nineties, Penthouse even moved to publishing hardcore images – something Hefner has always considered distasteful and refused to adopt in Playboy, maintaining a ‘legs together’ policy.

Playboy has seen tough times over the last 20 years. Its current circulation is 1.5m – a shadow of the 1970s peak of seven million. Last year the magazine twice announced it was reducing its publication schedule – it now comes out just 10 times a year and recently began cutbacks which could see its 570-strong workforce halved.

While the invention of the lads' mag - essentially a similar offering to Playboy with an aspirational mix of lifestyle articles and soft porn but characterised by a younger, fresher attitude – is partly to blame, the greatest crisis for the magazine has been the rise of internet pornography. Between 1997 and 2001 – the years of the dotcom boom – revenue from sales of pornographic magazines in the UK declined from £5m to £3.4m.

But the internet has also been highly lucrative for pornographers who have been quick to embrace each new wave of technological innovation. And it may be that there is more money to be made from the magazine: David Bank, an analyst at RBC Capital told the Guardian that said Playboy has been an "underleveraged brand".

In 2007, the international market for adult content via smartphones and other mobile devices reached $1.7bn. According to Juniper Research, a UK analyt, it could tip $4.6bm by 2012. With the launch of a Playboy app for the iPhone in December last year, perhaps the grand old man of adult publishing has some mileage left in him yet. ·