The Rise and Fall of Friendster: A Social Networking Startup


Friendster, founded by Jonathan Abrams in 2003, was an early social networking site with a unique blend of social interaction, gaming, and events. With a peak user base of 115 million, it dominated Asian markets like the Philippines, Malaysia, and Singapore.

How Friendster Worked:

Friendster aimed to facilitate social interactions, gaming, and content sharing. It embraced Asian languages early on and even ventured into the payment platform space with “Friendster Wallet.” The company introduced offline cybercafes and free wifi infrastructure, showcasing innovation beyond its core features.

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Business Model:

Advertisements were Friendster’s primary revenue source, along with selling access to APIs for developers. The in-app purchase model using Friendster Wallet added another stream. It was a pioneer in creating an open, non-proprietary platform with an open revenue model for developers.

Rise of Friendster:

Launching in 2003, Friendster quickly reached 3 million users, facing early competition from Facebook, Yahoo!, and Microsoft 360. Despite a $30 million offer from Google, Friendster pressed on, gaining backing from renowned venture firms. By 2008, it had over 115 million registered users.

What Happened:

In 2011, Friendster pivoted to a social gaming site, discontinuing its social network accounts. The move aimed to complement Facebook rather than compete. However, due to user experience issues, CEO changes, and a delayed fix for loading speed, users migrated to Myspace and, ultimately, Facebook. Friendster officially shut down in June 2018.

Lessons Learned:

  1. Timing Matters: Friendster faced challenges despite being an early mover. It’s not about being the first but learning from predecessors and avoiding their mistakes.
  2. Venture Capital Pitfalls: Raising funds can be detrimental if not managed properly. Too many board members can limit flexibility and prioritize growth over everything else.
  3. Customer-Centric Growth: Pursuing growth at any cost, especially at the expense of current customers, can lead to failure. Friendster failed to capitalize on its early success.

Key Takeaway:

Friendster’s downfall teaches us that success is not guaranteed by being a pioneer; it requires continuous adaptation, customer focus, and strategic decisions that prioritize long-term sustainability over rapid growth.

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