Despite a loss of $43.2 million last year, there are some compelling reasons to consider investing in FriendFinder Networks Inc.’s (Ticker: FFR) IPO. Here’s the case for a bullish bet:

1) Hands-off revenue streams. FriendFinder is best known for its more scandalous properties, including Penthouse Magazine and AdultFriendFinder.com. In fact, the company’s made up of more than 30,000 dating web sites that cater to micro-niches from Italian dating sites (ItalianFriendFinder.com) to Jewish dating sites (JewishFriendFinder.com) to gold-digging sites (MillionaireMate.com). Seventy percent of the company’s income comes from the subscription fees for these social networking sites, and more are likely in the works. “Our social networking technology platform is extremely scalable and requires limited incremental cost to add additional users or to create new websites catering to additional unique audiences,” the company writes in its IPO filing.

Each subscriber costs the network an average of $47.25 to acquire. Sounds expensive, but each new acquisition spends an average of $80.17 in membership fees. That’s just shy of $33 in profits per subscriber. All told, the FriendFinder network reaches 196 million unique visitors a month. As they roll out more niche sites, they’ll likely turn more of those visitors into subscribers. FriendFinder Network currently has 1 million paying subscribers, all of whom provide a steady source of revenue for the company.

2) Pay-per-minute. One of the network’s more interesting revenue streams comes from per-per-minute video chats with models. FriendFinder Network pays models to chat with lonely singles (clothing optional, of course). Singles pay per the minute for the privilege. Interactive video currently accounts for 22 percent of the company’s revenue, and that figure could grow as the company expands interactive video services into new niches and web users get more comfortable with video chats.

3) International growth. FriendFinder Network has been pushing hard into foreign markets, and growth outside the U.S. could supply the bulk of the stock’s upside in the future. “In 2010, nearly 71% of our members were outside the United States, but non-U.S. users accounted for less than half of our total net revenues,” the company writes. “We seek to expand in selected geographic markets, including Southeast Europe, South America and Asia. Our geographic expansion, in conjunction with growth in alternative payment mechanisms — including credit card and non-credit card payments, such as pre-authorized debiting and mobile phone payments — in our targeted geographic areas should allow us to significantly increase our revenue and EBITDA.” Making the payment process easier and less intimidating could turn those registered users into paying subscribers. And that would provide a major boost to FriendFinder’s bottom line.

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