Friendster Gets $10 Million More

Today’s WSJ (sub. req’d) has the details:

Friendster Inc., the pioneering social-networking company that has lost ground to newer rivals such as MySpace.com and Facebook Inc., plans to announce today that it has received $10 million in venture-capital funding, the latest move by investors to resurrect the company.

DAG Ventures, Palo Alto, Calif., is leading the round, with two of Friendster’s original investors, Kleiner Perkins Caufield & Byers and Benchmark Capital, also participating. Friendster’s valuation wasn’t disclosed.

Now Friendster is scrambling to regain its footing, aiming at adults in their 20s and 30s instead of trying to compete for the younger audiences that have flocked to MySpace and Facebook.

MySpace has revenues but it has mysteriously been able to aggregate a huge mass audience. And “social networking” isn’t a business model it’s a now almost ubiquitious layer of functionality — community/social media — on other apps (so-called Web2.0).

The Journal article discusses the challenges of succeeding today even with massive valuations circling Facebook and Bebo. Serving people in their “20s and 30s” is too amorphous to be meaningful. And Friendster’s brand is tainted by its missteps and its “been there, done that” aura. Brand may be its biggest problem in fact. If I were Friendster I’d relaunch with a new brand once the company figures out its strategy and model (advertising).

Friendster was awarded a patent and could try and leverage that for license fees. But that’s not really a business model, not guaranteed and probably involves litigating, which would distract from the mission — sell the site!

What do you think? Is this good money after bad (again)?

3 Responses to “Friendster Gets $10 Million More”

  1. Niki Scevak Says:

    There are two things in their favor this time, both flow-on. Google will be investing a significant effort in trying to figure out how to monetize MySpace in the next three years, now that they have guaranteed hundreds of millions of dollars.

    That solution will surely be applied to Friendster once something is figured out. Secondly, internationally the competition is much more wide open. Google’s Orkut is huge in Brazil and Friendster has some decent traction in lower value Asia. If friendster can avoid it’s earlier mistakes (simply having the site stay up) the busniess is worth something. It’s not a swing for the fences deal, but the company can conceivably be worth $50-100m.

  2. Greg Sterling Says:

    Agree re the International angle. To your point, Friendster has traction in the Philippines. And Yahoo or MSN might welcome a similar deal to the Google-MySpace (although again, Friendster is perceived as an “also ran”)

  3. AhmedF Says:

    Philippines 🙂

    If all goes right, within 12 months we will be nipping at Friendster there.

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