Know When To Hold 'Em, Know When To Sell Out
from the hindsight-is-20/20 dept
Friendster has been looking for a buyer for some time, while its selling price keeps dropping and dropping. About this time last year, $200 million was being tossed around as Friendster's buyout price. Now PaidContent reports it's been offered to Viacom for just $5 million -- but the media giant's even balked at that, about a month after offering $20 million for the one-time social-networking supersite. It looks like the tale of Friendster will go down as a cautionary one, both for companies investing large sums of money in the latest online fad, but also for entrepreneurs whose greed can often outpace their business sense (especially when the implosion was so easy to see coming). The word on the grapevine is that Google offered to buy Friendster for $30 million worth of pre-IPO stock in late 2003, but Friendster founder Jonathan Abrams rejected it in favor of $13 million in VC funds because the firms valued the company at $53 million. Of course, now, those firms no longer want to fund the company, and Google's stock is worth nearly $500 per share. Looks like the number of people marking Friendster as a friend in their profile is dwindling.
Reader Comments (rss)
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i'll buy friendster
i have 500 bucks in the bank, heck i'll toss in some anime dvds i have laying around. Interested in the old evangelion boxset? i gotta get the new platinum thinpack anyways.
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Let me think...
BAHAHAAHAHHAHAHHA......HAHHAHHAH! It's nice to see greed not pay off for once. IMHO any company that pays hundreds of millions of dollars to aquire one of these types of sites is a sucker, and should be slapped around by their shareholders.
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No Subject Given
Can someone explain the difference between Friendster and MySpace? They seem identically stupid to me, but one gets bought by Murdoch, the other is swirling around the toilet bowl...
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Greedy, Greedy.
Talk about unbridadled greed & ego!
If you can capture 50% of the upside of a business before selling, you should consider yourself lucky. And $20-$30 million is nothing to balk at.
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No Subject Given
The thing that gets me is that there google stock is probably worth 10 times what they would ever have got for the site, and will continue to appreciate in value.
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API!
Without some sort of an API, all social networking sites are doomed, I refuse to maintain 5 different accounts. With that said, friendster and myspace are both terribly ad infested, myspace does offer a bit more fuctionality, so does facebook (not really). LJ, Blogger, MSN Myspace, Typepad, and wordpress to a lesser extent offer most of the same social networking features w/o ads (and are overall much better at social networking), extending these platforms to mobile phones, maybe a cross-promotion deal with a telco wouldn't hurt. Add a web calendar accessible on mobile phones, and the telco's have probably found a way of solving the bandwidth used/user dilemma. I'd be willing to bet Orkut isn't worth much more than friendster is. Missing from all this is yahoo, which did acquire flickr and del.icio.us.
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Re: Let me think...
I think that would depnd on what they did with it. There is some success here do you not think it reached you....
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Re: Let me think...
You've missed the point of my sardonic comment. I didn't say that social networking sites are without value. I said that they're not worth hundreds of millions of dollars to aquire. Couple of million, maybe, but hundreds? Buzz does not create real value. Are you willing to bet the future of your company that you can recoup the price?
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Who?
What is Friendster? Never heard of it.
There's your problem right there.
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Re: Who?
ditto
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