Facebook Picked Up Friendster's Patents For More Than It Cost To Buy Friendster

from the patent-valuation dept

A few years back, there was quite an uproar over the discovery that Friendster had received a patent on the basic concepts of "social networks." The company, which was already becoming an also-ran in the social networking space made a lot of noise about enforcing the patents against competitors, but not much came of it. However, the company did keep collecting patents. We were actually wondering about those patents a couple months ago when Amazon popped up with a patent on some basic social networking concepts. Turns out that just a month earlier Facebook had quietly bought Friendster's 7 patents and 11 patent applications for an astounding $40 million. Of course, it wasn't $40 million entirely in cash, but a mixture of cash, advertising and "payments for virtual goods" (don't ask).

What's impressive here is that the entire company Friendster had been sold just a few months earlier for... $39.5 million. So the buyer has effectively recouped the purchase price in less than a year. Impressive. As for why Facebook just wasted so much money (even if not all of it is "real") on a bunch of patents? As Liz Gannes postulates, it's probably just to keep the patents from getting in the way of an upcoming IPO. For a company currently valued at such insane levels, $40 million to clear an obstacle to an IPO is nothing major -- especially when a portion of the deal is via in-kind services. Hopefully Facebook knows better than to start using the patents offensively, but somehow, I get the feeling this is not the last we'll hear about these patents.

Filed Under: patents, social networks
Companies: amazon, facebook, friendster

Amazon 'Friends' Patent Office: Gets Social Networking Patent

from the one-click-friending? dept

You may recall a few years ago that many people were up in arms over the ridiculousness of Friendster, the social network that kicked off the social networking craze (though it was hardly the first in the space), which got a patent (7,069,308) on the basics of social networking (claiming "a system and method for connecting users in an online computer system based on their relationships within social networks"). Lots of people pointed out the rather ridiculous amount of prior art on this patent, and feared that Friendster (by then very much an also-ran in the social networking world) was about to turn patent troll. Since then, the company has picked up a few more patents on some other aspects of social networking as well.

So, we were a bit surprised to see lots of folks sending over the news (first highlighted at Slashdot), that Amazon has been awarded a patent, 7,739,139, on a "Social networking system."

Even though it was only filed in 2008, that's not actually the relevant date. It's a continuation patent -- a dreadfully bad part of the patent system that is regularly abused to create "submarine" patents. While patent system defenders will deny this, the continuation process is regularly used to adjust what a patent covers over time, to make sure that it really covers more modern inventions than when it was originally filed. The Patent Office tried to stop this abuse by limiting continuations a few years ago, but a court eventually told them the USPTO couldn't actually do that. In this case, this patent isn't just a continuation patent, it's a continuation patent of a continuation patent of a continuation patent of an original patent filed back in 1997.

And, because of that, we get patents like this one. Since the priority date in November of 1997, all the fancy social networking stuff actually invented elsewhere doesn't count as prior art, but given how many such systems were built between now and then, it's hard to see how the specific claims in this patent could possibly pass the obviousness test. Tons of companies came up with identical systems over the years, suggesting that it was clearly the next obvious progression in this area.

Filed Under: patents, social networks
Companies: amazon, friendster

Who's Behind The False Rumors That Facebook Might Start Charging?

from the you-gotta-wonder dept

Way back when Friendster was the super hot social networking startup with an unworkable business model, there was suddenly a rush of rumors that the company was going to start charging for use. Even though the company never suggested plans to charge, there was an outcry among users -- and I remember getting messages from people threatening to boycott Friendster if it ever did charge. In fact, many people started suggesting alternatives... with MySpace being a key one. It wasn't long after this episode that many people really did start migrating over to MySpace. Later on there were reports that the "rumors" about Friendster charging were actually started (and then spread) by MySpace employees. And it worked.

It looks like someone may be trying to pull the same trick with Facebook. Apparently a bunch of rumors have been spreading about Facebook planning to charge, resulting in huge protest groups in Facebook, and the company needing to make a public denial of any plans to charge. In Facebook's case, this is even more believable because the company claims that it's already profitable from existing ad sales. And, knowing how Facebook operates, I can't see anyone there seriously considering charging for use. They know the idea is preposterous and would destroy the site.

So the only thing I'm wondering is who kicked off these rumors? Is it another social network? Is it MySpace again trying to regain relevance? Or was it really just another malware scam to get people to click on unsafe links, that then resulted in a misguided panic?

Filed Under: charging, rumors, social networks
Companies: facebook, friendster, myspace

Does No One Remember The Friendster Fakester Fiasco? Facebook Now Dealing With Fakebookers

from the been-there,-done-that dept

Those who don't remember history are doomed to repeat it, right? There's been a bunch of buzz in the blogworld over Facebook's decision to kick out a user who went by the pseudonym Jon Swift. The complaint from Facebook was that impersonating someone or not using a real first and last name was against the terms of service. Of course, there are many such fake profiles in Facebook and the faux-Swift argued that if people knew you by the fake name there seemed to be no reason to keep that person out. Following an outcry from Facebook users, the company relented and let Swift back into Facebook, saying that since he's known by that name, it was okay.

What's amazing, though, is how (as far as I can see) none of the folks commenting on this story compares it to the nearly identical situation that happened with Friendster back at the height of its popularity. Lots of people had started creating fake Friendster profiles and the company just started deleting them as fast as possible. It pissed off a bunch of users, and some people felt that this was the turning point for Friendster. It was the point that people began to realize that this fun community they were involved in had separate rules that they didn't all agree with, and it led many people to go searching for more open social networks. Given that history, it's surprising that Facebook took the same humorless position on it -- but perhaps the kids at Facebook weren't around during the Friendster days, so they're doomed to repeat its history...

Filed Under: fakesters
Companies: facebook, friendster