Friendster started looking for buyers in July 2009. On 10 December 2009, the once leading social network is acquired by Malaysia’s MOL Group. No financial details were announced. However, in July this year, TechCrunch estimated Friendster to worth around US$137 million. (UPDATE: TechCrunch reported Friendster valued at $26.4 Million in sales)
Why buy Friendster? According to the new MOL/Friendster Group CEO Ganesh Kumar Bangah, it’s because of its “strong South East Asia base… very focus, has a very strong following in Malaysia.” He believed “right localization,” in terms of features, contents and applications, is Friendster’s competitive strategy. Ultimately, he envisioned Friendster as South East Asia-centric community, a platform for Asian-ized contents and applications.
He also mentioned about his intention to purchase Friendster way back in 2007 but was not taken seriously by some of shareholders of the social network. When Richard Kimber became the CEO of Friendster, MOL started to establish commercial relationships with Friendster. “After a while, when we look into how we can have a deeper relationships, and that culminated into today’s MOL buying Friendster,” said CEO Bangah.
To remain competitive, Friendster already launched (or going to launch) these features on its social network:
- Microtransactions or sales of virtual goods, are particularly popular and widely adopted by the Korean (Cyworld) and Chinese (QQ.com) social networks. Friendster already launched its Wallet and Gift Shop. With microtransactions, is Friendster is merely trying to milk an aging cow?
- Social gaming: Facebook and MySpace are already the two popular social gaming platforms. Electronic Arts recent purchase of social gaming company, Playfish, in a deal worth US$400 million, underscored the upside of this segment. Friendster will soon join the party.
- Music: MySpace is still the king of the hill, when it comes to music. It is still THE preferred social network for music bands. Friendster too is eyeing to enter this space. (This is no surprise, considering Friendster’s Head of Asia, Ian Stewart is formerly from MTV).
Friendster (and other social networks) can no longer compete with Faceboook, on scale and scope. So, MySpace is carving its niche along area of interest, which is music; whereas Friendster along regional lines. The new Friendster’s goal is to be the favorite social network for youth in South East Asia through fun, simplicity and local knowledge.
Below is the full speech made by Group CEO Ganesh Kumar Bangah at a Friendster’s event last night.