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 Habbo  chat disabled as another investor pulls out

Habbo chat disabled as another investor pulls out

June 14, 2012 | By Mike Rose

June 14, 2012 | By Mike Rose
More: Social/Online, Business/Marketing

Amidst the ongoing fallout from a damning investigation by UK broadcaster Channel 4 about children's chat and gaming website Habbo, owner Sulake has been forced to disable all chat across the entire website as another major private equity group has ditched its shares.

Habbo, previously known as Habbo Hotel, first launched in 2000 and touts itself as a hangout for teenagers. The service currently boasts over 268 million registered users in total and 10 million unique visitors every month.

The Channel 4 report earlier this week alleged that a reporter was met with chat that was "very sexual, perverse, violent [and] pornographic" in nature, and not suitable for the audience it is aimed at.

As a result of the investigation, Balderton Capital, who owns a 13 percent stake in Sulake, said that it will be returning its stake in Sulake at zero value, while British retail giants Tesco and WH Smith have withdrawn the sale of gift cards for the website.

Now the 3i group, a private equity group which owns 16 percent of Sulake, has met with the board of Sulake, and decided to offload its shares in the company, according to the Guardian.

In the meantime, Sulake CEO Paul LaFontaine revealed that all user conversations across the entire Habbo website have been muted pending an internal investigation, potentially lasting "days and weeks."

"We are still reviewing our long-term plans for the Habbo community," he explained, "and would like to thank our millions of loyal users for their support at this challenging time. This decision has not been taken lightly and underlines the companyís continuing commitment to ensure that all our site users remain safeguarded from inappropriate behavior and conversations."

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