What is Friendster.com?
Friendster was a Social Network Gaming Site founded by Jonathan Abrams and launched in March 2003. It can be attributed as one of the original social networking sites. Friendster allowed users to play online games, send messages, share images/videos and write comments.
The website was also used for dating and exploring new events, hobbies, and bands. With over 90% of traffic coming from Asia (Philippines, Malaysia, and Singapore), it reached a user base of 115 Million.
How did Friendster work?
Friendster’s primary purpose was to allow everyone to interact and socialise with their friends and family and make new friends eventually!
It offered social gaming, i.e. users could play games with their friends, and it gave users a reasons to keep coming back to its platform. Users could also discover new bands, hobbies, and events in addition to sharing content.
Earlier versions of Friendster were almost similar to 2003’s Facebook. It was the first social media network to accept Asian languages, which helped people connect worldwide.
In 2009, after the acquisition by MOL, they launched a payment platform, Friendster wallet, which allowed users to spend throughout Friendster’s site for gifts, and new, upcoming goods and services.
In the same year, they also launched “Friendster iCafe”, offline cybercafes, especially for gamers and “Friendster Hotspots” for retailers as a free wifi infrastructure.
Friendster’s Business Model
Like any other Social Media Company, advertisement was their primary source of revenue. They sold advertisements for companies who wanted their Ads shown to a massive base of users.
They also sold access to their APIs to developers, which could be used within the Friendster Network to build and deploy customisable applications on Friendster. Friendster's Developer Program was an open, non-proprietary platform with an open revenue model.
Another revenue source was the users of the in-app purchase on Friendster’s network using Friendster Wallet.
Rise of Friendster
Friendster.com went live in 2003 and quickly garnered 3 million users within the first few months. It received direct competition from Facebook, Yahoo! And Microsoft 360. Google even offered $30 million to buy out Friendster in 2003, but the offer was turned down.
They were backed by Kleiner, Perkins, Caufield & Byers, and Benchmark Capital at a reported valuation of $53 Million back then. In 2008, Friendster grew its membership base to more than 115 million registered users and continued to grow in Asia.
On December 9, 2009, Friendster was acquired for $26.4 million by MOL Global. Next Month, Friendster’s other core technical infrastructure patents were bought by Facebook for $40 million.
What happened to Friendster?
In June 2011, the company pivoted itself to a social gaming site and discontinued its social network accounts. Friendster gave a deadline of 27 June for users to export their photos. Photos that would not have been exported before the deadline were removed and would no longer be retrievable.
They said they didn’t want to compete with Facebook but rather complement it. This resulted in bulk migration of its users to Myspace and then finally to Facebook.
Another reason could be the frequent CEO changes. Within seven years, they changed six CEOs.
In April 2004, John Abrams was removed as CEO, and Tim Koogle took over as an interim CEO. Koogle previously served as president and CEO at Yahoo!. Scott Sassa later replaced Koogle in June 2004. Sassa left in May 2005 and was replaced by Taek Kwon. Kent Lindstrom then succeeded Taek Kwon.
Each of those CEOs brought a unique leadership style and vision for the company, which made it tough to plan for the long-term.
One primary reason was the terrible user experience. The site took up to 40 seconds to load; instead of solving the problem, the executive team focused more on adding features, which further deteriorated the user experience. Friendster eventually managed to fix the loading speed issue. Unfortunately, by that time, Myspace and Facebook had already overtaken it, and it became impossible to catch up.
So What happened to Friendster - It Failed. All the above reasons combined led to the fall of Friendster. On June 14, 2015, the site and its services shut down indefinitely, but the company did not officially close until the end of June 2018.
Lessons from Friendster’s failure
Users migrated to Facebook, making it the largest social media network even after Friendster’s first-mover advantage. You do not have to be first to win, but learn from your predecessors and do not repeat their mistakes. You can be a copycat and still become a market leader!
Raising funds via venture capital could be disastrous if not done right. Having many board members loses you the flexibility to try out innovative things. It becomes growth above anything else.
Friendster failed to capitalise on its early success as one of the first social media platforms to experience mass uptake. Do not pursue growth at all costs, especially at the expense of your current customers.
“Most people don’t cross the fear chasm, and with good reason, because most startups fail, but to an entrepreneur, the ups and downs sound cool rather than scary.”, John Adams, CEO and Founder of Friendster, in his interview with Nicole Ely from Stanford.