Friendster

What did it do?

Friendster, founded by Jonathan Abrams in Mountain View in 2002, was one of the first social networks, letting users build networks of friends and share photos, messages and comments. The site was also used for dating, events and music discovery. In 2009 it was sold to Malaysia's MOL Global, and in 2011 it became a social gaming platform.

Why did it shut down?

According to Nielsen//NetRatings, Friendster was the leading social network until around April 2004, but it was overtaken by MySpace in page views. Its rejection of Google's $30 million acquisition offer in 2003 was regarded, according to the Associated Press, as one of Silicon Valley's biggest mistakes. There were frequent changes of CEO, and a later capital raise valued the company at less than 5 per cent of its 2003 value. US traffic fell sharply from 2009, a decline largely attributed to the rise of Facebook. Having shifted its focus to Asia, the company was sold in 2009 for $26.4 million; the pivot to social gaming did not save it either, and its services were halted in June 2015.

The story

In 2003 Google offered $30 million to buy the one-year-old Friendster. The company turned the offer down and, that same year, reached a valuation of $53 million with investment from Kleiner Perkins and Benchmark Capital. The Associated Press later described the decision as one of Silicon Valley's biggest mistakes.

Friendster was founded in Mountain View in 2002 by the Canadian programmer Jonathan Abrams. Its name combined the word friend with Napster, the famous file-sharing service of the day. Launched before MySpace, hi5 and Facebook, the site reached 3 million users in its first few months; publications such as Time, Vanity Fair and Spin wrote about its success, and its founder appeared on magazine covers and late-night shows.

The lead did not last. According to Nielsen//NetRatings, MySpace overtook Friendster in page views around April 2004. That same month Abrams was removed as CEO; Tim Koogle, Scott Sassa, Taek Kwon and Kent Lindstrom then took the helm one after another. A later capital raise by Kleiner and Benchmark valued the company at less than 5 per cent of its 2003 value. Between 2006 and 2008 the company kept raising money in rounds led by DAG Ventures and IDG Ventures.

Friendster's second life began in Asia. By 2008 it had passed 115 million registered users, and the site was the social network with the most monthly unique visitors in Asia. In the US, however, traffic collapsed from 2009, a decline largely attributed to the rise of Facebook. In December 2009 Malaysia's MOL Global bought the company for $26.4 million, while Facebook bought Friendster's patents for $40 million in 2010. Having become a social gaming site in June 2011, Friendster halted all its services on 14 June 2015, and the company was formally wound up in 2018. The domain changed hands in 2023; in 2026 a new app with no legal or technical connection to the old platform launched under the same name.

Friendster was among the pioneers that took the idea of the social network into the mainstream, but being first did not bring a lasting advantage. A first-mover advantage can melt away easily when rivals grow faster and management keeps changing.

Lessons for founders

• Being the early leader is not a lasting advantage; when rivals such as MySpace and Facebook arrive, keep measuring what keeps users with you.
• When you turn down a serious acquisition offer, write down your reasoning and your next valuation target, backed by concrete data.
• Frequent changes at the top blur the direction of the product; settle the division of roles between founder and investors early.

Sources

1. Friendster (Wikipedia)
2. After seven years, Friendster sells to Malaysian company (The Guardian, 2009-12-10)
3. The Friendster Tell-All Story (TechCrunch, 2006-10-15)
4. https://www.wikidata.org/wiki/Q1347103
5. Wikipedia (Turkish)
6. Wikipedia (English)

This section is compiled from public sources (Wikidata, news archives and company announcements). Figures are given as they appear in those sources; unknown fields are left blank. If you spot a mistake in an entry, you can send us a correction.

Is something in this entry wrong? Request a correction → Method