When times are good, the internet is responsible for memorable stories of rapid riches. But economic downturns are different. Even through parts of the internet economy have held up well, relatively speaking, in this economic downturn there are a growing number of gold to lead stories.

The latest such story: ITV’s sale of Friends Reunited to DC Thomson for £25m after down-to-the-wire negotiations with a number of suitors.

Friends Reunited, which rose to prominence as one of the UK’s earliest social networking success stories, grew to over 15m members before it was purchased by ITV for £170m (after earn-outs) in December 2005.

At the time, the acquisition was one of the first big M&A deals in the social networking space and seemed to put ITV in position to capitalize on the then still-burgeoning market. But instead of developing Friends Reunited into a social networking powerhouse, ITV watched as upstarts like MySpace, Facebook and Bebo ate Friends Reunited’s lunch. It’s a story we’ve seen more than a few times: promising startup gets bought by big company, loses its direction, fails to innovate and helplessly falters.

But what’s so remarkable about the sale of Friends Reunited to DC Thomson, which owns the company that runs FindMyPast.com, is just how steep the fall was. The £25m price ITV was able to secure is a far cry from the £170m it paid for Friends Reunited less than four years ago. And it’s a far cry from the amount it was seeking in earlier efforts; there were reports in March that ITV was looking for £60m.

So what does the future hold for Friends Reunited? DC Thomson plans to merge Friends Reunited subsidiary Genes Reunited with FindMyPast.com. It’s not clear what the fate of Friends Reunited proper will be.

Of course, although many will remember Friends Reunited for its fall, we should focus on its rise. The husband and wife team who conceived of the site back in 1999, Steve and Julie Pankhurst, are estimated to be worth £30m post-acquisition and it should be noted that Friends Reunited survived the .com bust when so many others didn’t. So regardless of the ending, Friends Reunited remains one of those great internet success stories.

Photo credit: irina slutsky via Flickr.