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The firm is examining small ads as a potential growth area, citing eBay as an example of how the model can work online.

It is not certain whether the new service, which wouldn't be launched until next year, will be developed. But marketing director Tim Ward said classified ads would fit well with Friends Reunited's theme of providing "personal connections".

Ward, who joined the firm as part of a management buy-in in 2003, said: "No decision has been made, but we obviously look at areas that are about personal connections. (Classifieds are) all about peer-to-peer and we've had some really positive feedback from customers."

He said attempts had been made to exploit online classifieds by some brands, including Fish4 and Loot, and that the popularity of Friends Reunited's brand and sites helped to justify the launch.

Ward added: "In hindsight, Genes Reunited and Friends Reunited Dating seem obvious, but it's not always clear what will work and what won't."

He said the company spent no more than £30,000 on testing new services and could afford the risk.

If launched, the service would be the fifth extension to the Friends Reunited brand, which most recently took in Connections; a service offering messageboards and chatrooms to users. In March, it bought online jobs board Top Dog Jobs as a platform to launch its own recruitment service.

These moves have followed the 2003 management buy-in in which Michael Murphy also joined as CEO and Rob Mogford as CFO. Husband and wife co-founders, Steve and Julie Pankhurst, remain involved in the business.

The new investment team has helped to develop the company, including its first major acquisition, School Friends, which was the most-visited reunion web site in Australia, New Zealand and South Africa in 2004.

- See Pankhurst column, p13.