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.

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Comments on “Know When To Hold 'Em, Know When To Sell Out”

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Argo747 says:

Re: 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?

devang (user link) says:


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

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