Last updated: December 10, 2009 6:54 pm

Malaysia’s MOL Global buys Friendster

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Friendster, the site that pioneered social networking early in the decade, is being acquired by a Malaysian online payments provider, bringing to an end one of the stranger dotcom sagas.

While its star has faded in the US and Europe, Friendster is popular in south-east Asia.

MOL Global said it hoped to pair its retail partners and payment platform with Friendster’s large regional network to create a content, distribution and commerce network.

Terms of the deal were not released, but MOL is expected to pay at least $100m for the site.

California-based Friendster, founded in 2001, popularised social networking in the US. For a time it was among the hottest groups in Silicon Valley, attracting venture capitalists such as John Doerr to its board. But it struggled to win mainstream adoption. Outages plagued the site, which was often slow.

When MySpace was founded in 2003, it won users from Friendster by allowing customised pages and a richer media experience, quickly becoming the preferred social network for the younger generation.

Facebook has eclipsed both Friendster and MySpace, growing to more than 350m users at a time when social networking has become mainstream.

Asian teenagers, however, have continued to embrace Friendster. Out of the shadow of MySpace and Facebook, the group has a presence in the region, with about 75m registered users, more than 90 per cent of whom are in Asia.

Richard Kimber, Friendster chief executive and formerly Google managing director for south-east Asia, said: “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.”

Friendster has been preparing for a sale, rolling out a redesign and hiring Mr Kimber.

MOL, which has become the payments provider for Friendster, handles more than 60m transactions a year with an annual payment volume of over $200m. It provides systems to collect payments for content and services, such as online games and music, film and video content.

MOL’s principal shareholder is Vincent Tan of Berjaya , who owns south-east Asian franchises of Starbucks, 7-Eleven, Borders, Krispy Kreme, Wendy’s and Papa John’s Pizza.

MOL said that Friendster, which has raised $45m and has obtained five US social networking patents, was expected to help contribute $110m in annual revenues.

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