Friendster
From Invertopedia, the encyclopedia of how things fail
Friendster was the social network Jonathan Abrams started in 2002 and launched in March 2003; it had three million registered users by that fall[1]. Abrams turned down a $30 million offer from Google and took venture money instead[1][3]. As traffic grew the site slowed until a page could take 40 seconds to load[1], users left for MySpace[1][4], and in 2009 Friendster sold to Malaysia's MOL Global for about $26.4 million net to shareholders[3].
Contents
The bet
Friendster had the lead and the attention. Some of the best-known investors in Silicon Valley told Abrams that if he sold them a stake for $13 million instead of taking Google's offer, they would help build Friendster into a company worth hundreds of millions, if not billions[1]. John Doerr of Kleiner Perkins and Bob Kagle of Benchmark joined the board[1].
The product bet was a closed network: users could only see the profiles of people a short chain of friends away[1]. It was meant to keep the site about real connections.
What happened
| 2002 | Jonathan Abrams starts Friendster.[1] |
|---|---|
| Mar 2003 | Friendster goes live, spending nothing on marketing. It has 835,000 users by June and 3 million registered by the fall.[1][2] |
| 2003 | Abrams turns down a $30 million offer from Google, and Kleiner Perkins starts investing in November. That fall, MySpace is founded in Los Angeles, inspired by Friendster's early success.[1][3] |
| Apr 2004 | The board replaces Abrams as chief executive.[1] |
| As traffic grows | The overloaded site slows until a page can take as long as 40 seconds to load.[1] |
| 2005 | MySpace has 22.1 million unique monthly users to Friendster's 1.1 million.[2] |
| Late 2005 | A banker shops the company around, but no buyer will pay even $20 million. Payroll is cut in half, to 25 people.[1] |
| 2006 | Investors put in $3 million at the start of the year and $10 million in the summer. Three quarters of users now live outside the US, mostly in Southeast Asia.[1] |
| Dec 2009 | MOL Global buys Friendster for $39.5 million before deductions, about $26.4 million net to shareholders.[3] |
| 2011 | Friendster says it will delete user profiles, photos and messages by May 31, and in June relaunches as a social gaming site.[5] |
The kill shot
Pages took so long to load that users moved to MySpace. The board spent its time on the next big thing instead of making the site work.
As Friendster grew, its site got slower, until a page took as long as 40 seconds to load[1]. Early investor and employee Kent Lindstrom said the board discussed potential competitors and new features, such as internet phone calls, more than the performance problems[1]. Kleiner Perkins partner Russell Siegelman recalled that "half of every board meeting was taken up by a discussion of what Google's going to do, or Yahoo."[1]
The design made the problem worse. Friendster's closed network, where each user saw only nearby friends, was the cause of most of its technical problems; MySpace was open and simpler to run[1]. TechCrunch summed up the failure as a "disastrous initial architecture that just couldn't scale"[4], followed by a string of chief executives[4].
Red flags ignored
- Slowness treated as a detail. Page loads of up to 40 seconds, while the board talked about competitors and new features.[1]
- The hard feature was the one nobody needed. The closed friend-of-friend view drove most of the technical trouble, and MySpace won by being open.[1]
- Features made it slower. Rivals added blogs and profile tools, but each new feature would have slowed Friendster further.[1]
- Turnover at the top. The founder was replaced as CEO in 2004, followed by a succession of chief executives.[1][4]
The cost
The $30 million Google offer: had Google paid in stock, Abrams would easily be worth $1 billion, one person close to Google told the New York Times in 2006[1]. By 2006 MySpace had more than 50 times Friendster's monthly US visitors, and Friendster ranked 14th among social networking sites tracked by comScore[1].
When MOL Global bought it in 2009, the price was $39.5 million less about $13 million in debt, cash and fees, leaving about $26.4 million for shareholders; monthly unique visitors had fallen from 34 million to 18 million[3].
The inversion
Speed is a feature. A slow product loses to a fast copy, so fix the thing users touch every day before you plan the next big thing.
What survived
The patents and the Asian audience. Friendster's patents were sold to Facebook in 2010 for $40 million[2], and at its sale it still counted 115 million users, 75 million of them in Asia[2]. The name lived on for a while as a gaming site after the 2011 reboot[5]. In 2026 Mike Carson, who had bought the domain, brought the name back as an iOS app[6]. Its story became the warning Silicon Valley told startups: "It's become the iconic case of failure," Greylock's David Sze told the Times in 2006[1].
References
- ^ “Wallflower at the Web Party”. The New York Times (Gary Rivlin), October 15, 2006, read via the Internet Archive. Founded 2002, March 2003 debut, 3 million users by fall, the $30 million Google offer and the $1 billion estimate, the $13 million stake, Doerr and Kagle, Kleiner from November 2003, Abrams replaced April 2004, 40-second pages, board focus, closed network, MySpace founded fall 2003, comScore rankings, failed 2005 sale, 25 staff, 2006 funding, users abroad, Siegelman and Sze quotes.
- ^ “Antisocial Media: The Rise and Fall of Friendster”. Mental Floss (Jake Rossen), September 13, 2018. March 2003 launch, 835,000 users by June and 3 million by fall 2003, 2005 MySpace and Friendster audiences, 115 million users and 75 million in Asia at the sale, patents sold to Facebook for $40 million in 2010.
- ^ “Friendster Valued At Just $26.4 Million In Sale”. TechCrunch (Michael Arrington), December 15, 2009. The MOL Global sale terms ($39.5 million gross, about $26.4 million net), unique visitors falling from 34 million to 18 million, the rejected 2003 Google offer.
- ^ “The Friendster Tell-All Story”. TechCrunch (Michael Arrington), October 15, 2006. Kleiner Perkins, Benchmark and Battery Ventures; the slowdown and the move to MySpace; "disastrous initial architecture"; the succession of CEOs.
- ^ “From Social Network Pioneer To Yet Another Gaming Site: Friendster Reboots”. TechCrunch (Robin Wauters), June 29, 2011. User data to be deleted by May 31, 2011 and the relaunch as a social gaming portal under MOL Global.
- ^ “Friendster is back. What does this mean outside nostalgia?”. Philippine Daily Inquirer (Carl Martin Agustin) via Asia News Network, May 6, 2026. Mike Carson bought the Friendster domain and relaunched the name as an iOS app.