Saturday December 5, 2009

Friendster to be sold for US$100mil to Asian firm

SHANGHAI: Friendster, one of the world’s earliest social networking sites, will be sold to an Asian buyer by the end of December for at least US$100mil, a source familiar with the matter said.

Friendster, which predates Facebook and MySpace in the social networking space, was founded in 2002. But it quickly lost ground to other social networking sites in the United States. Friendster is now mostly used in Asia where more than half its registered 100 million users are from.

Friendster would be sold to an Asian listed firm for more than US$100mil in a deal set to be announced by the end of the month, a source said.

TechCrunch, an industry blog, said in July it valued Friendster at US$210mil, a fraction of Facebook’s estimated US$10bil valuation.

Friendster chief executive Richard Kimber told Reuters that Morgan Stanley had been hired to handle the deal.

“We have a shortlist at this point that we are negotiating with,” Kimber said.

Friendster, like Facebook, has been struggling to find an effective monetisation strategy. The company rebranded its main website yesterday, targeting a younger audience, and said it would shift its revenue focus from advertising to micro-transaction.

Headquartered in California, Friendster had turned down a US$30mil buyout offer from Google Inc six years ago, according to news reports.

Tencent Holdings, China’s largest Internet firm by market value at US$35bil, was among the shortlisted bidders, while Facebook also showed interest but was turned down due to competition and intellectual property issues, the source said. — Reuters

Friendster holds five US patents related to social networking, according to the United States Patents and Trademarks Office. — Reuters

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