ITV has emerged as the surprise front-runner to acquire Friends Reunited, the website dedicated to putting school friends back in touch.

The commercial broadcaster, which is trying to reduce its dependence on TV advertising revenue, is understood to have seen off competition from Daily Mail and General Trust, the newspaper group, and BT, the telecoms giant, with a bid rumoured to be £170 million.

ITV declined to comment yesterday but this week Jeff Henry, chief executive of the company’s new internet division, said at a conference in Barcelona: “ITV growth will also come from acquisitions and you can expect announcements imminently.”

A sale at the rumoured price would generate a windfall of about £50 million for Steve and Julie Pankhurst, the North London couple who set up Friends Reunited five years ago. It rapidly became one of the most popular websites in the UK, with 12 million registered users.

Friends Reunited was put up for auction in the summer, after the company concluded that it was not possible to grow further without becoming part of a larger group. Its founders are also understood to be happy to exit the company, which is run by Michael Murphy, a former Financial Times executive.

Last year Friends Reunited earned £4.6 million. The figure is expected to rise to £8 million next year, suggesting that ITV is willing to pay 21 times future earnings — a multiple that rivals did not want to match.

ITV’s move would be part of a wider plan to develop an internet stream of revenue. This move would reduce its dependence upon broadcast advertising, which is under pressure from the introduction of digital video recorders that make it easier for viewers to skip adverts.

ITV’s plan is to generate half its revenues from outside its core ITV1 channel from 2012. In its most recent interim results, ITV1 net advertising revenue accounted for 66 per cent of the whole business.

A combination of Friends Reunited and ITV’s existing web properties would take the commercial broadcaster into the UK’s top ten most visited websites, and help to boost audiences in an area where the BBC has been dominant. Mr Henry’s division last month started ITV Local, a trial of two TV news websites in the Brighton and Hastings areas, in an attempt to muscle in on local newspapers. The broadcaster intends to sell “video classifieds”.

ITV executives are thought to have considered making a bid for Exchange & Mart, the car classified title put up for sale by United Business Media this year in an effort to buy classified experience. The publication was acquired by Newsquest, part of the Gannett Group, of the US, for £50.25 million in cash.

It is not clear what the timing of any announcement will be and it remains possible that there could be a sudden change of outcome in the auction for Friends Reunited. ITV shares closed up ¼p at 108½p.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts