We Don’t Know Enough About the Pornhub Acquisition

It’s always weird to go viral, but it’s especially bizarre to do so for a thread about Pornhub. 

On March 20th, I tweeted out: “I’m like 99% sure Pornhub’s acquisition is a scam.” My thread went supernova hot with over a million views. Instantly I was inundated with potential sources who claimed to have the inside scoop about the deal and DMs calling me an idiot. I've had a lot of conversations with all of the above in the weeks since. 

Although I don't have a definitive explanation of this weird deal, I decided to share my theories and the context I've learned here. I’ll also explain why the purchase of Pornhub’s parent company should be attracting more media attention and analysis: 

1. This transaction raises a ton of questions and is deeply, deeply weird
2. There are three possible financing scenarios for this buyout, all of which are troubling
3. Given Pornhub’s reach, regulators should be paying closer attention

It is tempting to ignore this transaction because the business is some pervy corner of the internet. But I would argue that Pornhub (and by proxy its parent company MindGeek) is one of the most important websites in the world. Pornhub had over 2B visits last year and 100M+ daily active users. Visitor’s average time on site is 9 minutes and 54 seconds. Meaning that in 2022, a grand total of ~38,026.51 years of time was spent at this URL. 

Anything that aggregates this much attention matters. It will spawn content ecosystems devoted to monetizing the audience in whatever way is most profitable. An AI recommendation algorithm will tailor the experience for each user, trapping them in webs of personalized content. Money, power, influence, all of it flows downhill from this amount of eyeballs. And when there is this much influence, served across hundreds of millions of users, we often see bad actors and harmful repercussions. . 

Because of the adult nature of Pornhub, the consequences from this aggregation are extreme. Pornhub monetized videos of women being raped. The site was a hotbed of human trafficking. It hosted child pornography. It’s true that any website that allows users to share content—Facebook, Reddit, Twitter, Dropbox, literally anything with a button that says “upload”—have to deal with users sharing this type of content. But MindGeek seems to be particularly susceptible to these issues.

Whoever owns this website will not only have a direct influence over the state of sex trafficking globally but will also hold the emails, credit card numbers, and most private browsing habits of tens of millions of people. So, this deal matters beyond mere intellectual curiosity. 

Before we get into it, a disclaimer: I am not an investigative journalist. I am a finance and technology analyst who publishes semi-independently on the internet. This type of story is not my typical forte. But I hope that by sharing the context and connecting some of the dots, I might entice a real journalist to dig up the answers. 

Anywho, back to our programming. This transaction is bizarre.

Ethical is more of a hobby

On March 16th, Pornhub announced it had been bought by—get this—“Ethical Capital Partners.” It’s like the Medellin Cartel getting bought by “Totally Not Crime LLC.” 

When I first saw this I thought it was an early April Fool’s joke. 

When you take a look at the employees of ECP, the transaction gets even weirder. According to their LinkedIn profiles, only one employee has ever worked in finance before. None of them have worked in technology. None of them have publicly worked at ECP itself for longer than six months. The fund's leader Rocco Meliambro supposedly made his money in the cannabis industry. 

The firm's advisors are also unconventional. Some are sex work academics, some are more typical board members. One advisor brags about how she can crush watermelons with her thighs. (An impressive talent but one that has a tenuous link to ensuring child safety on the world’s second largest porn website.)