Pioneering Social Network Friendster Finds Buyer
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Friendster has a new owner. Following weeks of rumors, Malaysia-based online payments firm MOL Global confirmed it has entered into a definitive agreement to buy the site, an early mover in a market today known as the social networking space.
Launched in Silicon Valley in 2002, Friendster quickly became eclipsed by the newer Facebook and MySpace in the United States. But on a global basis it claims over 115 million registered users and is a top-25 global Web site serving over 9 billion pages a month, according to comScore data.
The social networking site has a particularly strong presence in Asia where it has over 75 million registered users.
Terms of the deal were not disclosed, although Reuters reported earlier this month, as rumors of the sale swirled, that the price would be over $100 million.
As a result of the move, MOL and Friendster will be combined to create what they described as Asia's largest content, distribution and commerce network -- the idea being that MOL's offline retail channel partners and payment platform will tie in neatly to Friendster online community in Asia.
"We are creating a unique company that will be well positioned to provide content to a huge, regional user base here in Southeast Asia," MOL President and CEO Ganesh Kumar Bangah said in a statement.
Friendster CEO Richard Kimber noted the deal "is a natural progression" that builds on a partnership his firm has had with MOL that enabled it to offer a micropayments system for content and services.
MOL served as the backend for the Friendster Wallet and the Friendster Gift Shop services that let users buy virtual gifts for friends.
"The new combined entity gives Friendster the kind of financial backing, retail distribution, and e-commerce infrastructure that will enable us to accelerate our strategy and create a locally relevant, fun experience for our users in Asia, both on and offline," Kimber said in a statement.
In addition to its membership and social network platform, Friendster owns a handful of other interesting assets, including patents related to social networking.
In October, the company announced it had been granted U.S. Patent No. 7,478,078, "Method for Sharing Relationship Information Stored in a Social Network Database with Third Party Databases."
The patent describes a technology through which social network information maintained in one database can be shared with a second database. It also describes how the operators of the second database can use the social network information to better manage services provided to their customers and target particular information to their customers, the company said.
Friendster has been granted five patents since 2006, addressing what Kimber described in October as "many key components of social networking." In addition to the patent on social networking information-sharing among databases, they include "establishing connections, sharing and distributing content, managing connections over time [and] assessing compatibility between users," he said.
It's unclear how the combined entity plans to use that intellectual property, but Kimber said in October that he anticipates receiving still more patents in the near future.