Friendster gets $10 million - GoFuckYourself.com

XonDemand · 08-26-2006, 11:54 AM

DAG Ventures, Kleiner Perkins and Benchmark Capital have injected another $10 million into Friendster, the first of the social networking systems, after washing out previous value in a $3 million recapitalization earlier this year. I can't imagine to what end.

Places you go to join communities are a dying breed, if you ask me. The fluid populations of online communities, which flowed from Friendster to newer models of community, such as Facebook and MySpace, then Relationships are constantly on the move, fragmenting and, most importantly, demanding new investment.on to sites like YouTube, are forever in motion, so what is it an investor is trying to capture? People? If so, then you have to recognize that people move on and the churn rate for a community site, where Friendster has turned over its entire membership at least twice if not five times since 2002, makes any investment in registered users as an asset you can sell?to advertisers or an acquiring company wanting the relationships?an exercise in depreciation. Sooner rather than later you have to write off the investment in acquiring those customers.

Let's imagine what $10 million buys today. Well, if it takes $10 to attract a customer, then you've purchased one million customer relationships, at first. After six months, churn brings the number of customers down to, say, 600,000. Of course, it may take much less to attract a customer, but the question is, if winning customers costs nothing and you don't earn any money from them upfront, just how valuable will they be to advertisers?

The dream is the demographic Nirvana, where communities collect so much data about the individual that every advertisement becomes a pre-qualified contextually relevant experience and conversion rates soar. But, so far, no one has seen that actually happen. Ad rates at MySpace and YouTube are abysmally low. In 2005, MySpace, which had more page views than Google, earned only about $30 million in revenue compared to Google's $6 billion.

The problem with the Nirvana scenario is that no community is a complete picture of the user. Community sites represent demographic slices, which is why the adjective "niche" has been applied to community when venture capitalists talk about success these days. So, one is constantly paying for a fragment of that demographic promised land at full Nirvana value. It's a losing business, because the asset?user relationships?are constantly on the move, fragmenting and, most importantly, demanding new investment.

article

elron · 08-26-2006, 11:58 AM

........

WiredGuy · 08-26-2006, 12:15 PM

Friendster has been a dying breed since MySpace came out. Even though they're playing catchup now, they've lost the battle in my opinion.
WG

czarina · 08-26-2006, 12:17 PM

I did not know that they were even still around.

If they want to catch up, they need to be in the news

Pleasurepays · 08-26-2006, 12:18 PM

Quote:

Originally Posted by WiredGuy

Friendster has been a dying breed since MySpace came out. Even though they're playing catchup now, they've lost the battle in my opinion.
WG

agreed... when your success relies soley on the fact that you are "the cool thing" at the moment... then its over the moment you aren't. usually, its over forever.

XonDemand · 08-26-2006, 06:26 PM

Quote:

Originally Posted by Pleasurepays

agreed... when your success relies soley on the fact that you are "the cool thing" at the moment... then its over the moment you aren't. usually, its over forever.

agreed, let's see is they can re-invent themself's

Drake · 08-26-2006, 08:14 PM

Great article, thanks for sharing. Based on his hypothesis about Friendster, and the actual dollar amount that MySpace is pulling in, it makes me wonder how long MySpace will be community site king - and if it even pays to be king for this style of site.

Big_Red · 08-26-2006, 08:15 PM

hot damn.

Solid Bob · 08-26-2006, 08:19 PM

Quote:

Originally Posted by Mike33

Great article, thanks for sharing. Based on his hypothesis about Friendster, and the actual dollar amount that MySpace is pulling in, it makes me wonder how long MySpace will be community site king - and if it even pays to be king for this style of site.

It pays to be king if you're not so stupid to lose money on all that traffic.

bknoob · 08-26-2006, 08:19 PM

let's not forget friendster owns the social networking patent. Besides, friendster is still huge in foreign countries and should be able to monetize that traffic just fine.

$5 submissions · 08-26-2006, 09:04 PM

Friendster has mostly FOREIGN traffic. Hard to capitalize. Try advertising there (paid or if you know what's up, for free) and you'll see what I mean. There ARE some mainstream products that do well there but they are not very obvious.

Pleasurepays · 08-26-2006, 09:12 PM

Quote:

Originally Posted by bknoob

let's not forget friendster owns the social networking patent. Besides, friendster is still huge in foreign countries and should be able to monetize that traffic just fine.

that assumes that people in countries where friendster is "huge" are just too dumb to figure out that clones might do well and will never compete.

Fizzgig · 08-26-2006, 10:42 PM

So Plentyoffish.com is a dying breed?

GTS Mark · 08-26-2006, 11:01 PM

Interesting article thanks for the post

DH

c.curtis · 08-27-2006, 12:26 AM

100 million registered users on myspace, and growing....but is it worth 588 million? no idea!

Drake · 08-27-2006, 12:58 AM

If he's right, we're seeing very strange thing happening. Sites with tons of traffic not having any profit potential? So long as there is traffic, and specifically in the amounts these sites see on a daily basis, money is to be made. Is this an indication that community site simply can't survive over long periods of time in their current format?

Drake · 08-27-2006, 12:59 AM

Quote:

Originally Posted by Fizzgig

So Plentyoffish.com is a dying breed?

I'd say this is proof these sites can work. They just have to change up the format, like not having videos in profiles etc.

Pleasurepays · 08-27-2006, 03:55 AM

Quote:

Originally Posted by Fizzgig

So Plentyoffish.com is a dying breed?

you do realize that this was 100% scam right? he was just an asshole that ran around making wild claims about how successful his site was and was never proven to make a dime.

Pleasurepays · 08-27-2006, 04:10 AM

Quote:

Originally Posted by Pleasurepays

you do realize that this was 100% scam right? he was just an asshole that ran around making wild claims about how successful his site was and was never proven to make a dime.

i meant by that, that he was busted time and time again for making false, impossible claims, hiring people to post all over the web about what a genius he is and for creating a buzz about the site. its kinda cool that he made a pile of crap famous, but the claims about that site being the biggest adsense site in canada, having xmillion hits per day, making 10K a day with adsense etc are bullshit.

DEA - banned for life · 08-27-2006, 05:46 AM

myspace is going to go bust in less than 3 years imho

scottybuzz · 08-27-2006, 06:16 AM

it wont go bust when it is owned by news corp imho

Rui · 08-27-2006, 06:20 AM

Quote:

Originally Posted by Pleasurepays

i meant by that, that he was busted time and time again for making false, impossible claims, hiring people to post all over the web about what a genius he is and for creating a buzz about the site. its kinda cool that he made a pile of crap famous, but the claims about that site being the biggest adsense site in canada, having xmillion hits per day, making 10K a day with adsense etc are bullshit.

I hope your not talking about Shoemoney's "arguments" to prove so

WiredGuy · 08-27-2006, 06:51 AM

Quote:

Originally Posted by Rui

I hope your not talking about Shoemoney's "arguments" to prove so

I think he's talking about Plenty of Fish.
WG

Klen · 08-27-2006, 06:54 AM

I still dont understud why myspace is so popular and friendster not.

AmeliaG · 08-27-2006, 07:00 AM

Quote:

Originally Posted by KlenTelaris

I still dont understud why myspace is so popular and friendster not.

I think it was because Friendster put a lot of limits on accounts that MySpace didn't.

Manowar · 08-27-2006, 07:14 AM

friendster are dying

free4porn · 08-27-2006, 08:04 AM

myspace is the king daddy now

XonDemand · 08-27-2006, 11:13 AM

Quote:

Originally Posted by scottybuzz

it wont go bust when it is owned by news corp imho

develop another online hot spot, as long as they capitalize on the traffic... and change with the times ;-)

XonDemand · 08-28-2006, 06:43 AM

Quote:

Originally Posted by AmeliaG

I think it was because Friendster put a lot of limits on accounts that MySpace didn't.

I would have to agree with this...

ElvisManson · 08-28-2006, 07:49 AM

Quote:

Originally Posted by AmeliaG

I think it was because Friendster put a lot of limits on accounts that MySpace didn't.

I don't know what their loadtimes were like in LA, but up here they were always bad. The peak loadtime issues myspace has now makes friendsters average loadtime seem like molasses in January.

Wizzo · 08-28-2006, 08:07 AM

They are in trouble now that http://www.petspaces.com is launched...

Wizzo · 08-28-2006, 08:07 AM

They are in trouble now that http://www.petspaces.com is launched...

QuaWee · 08-28-2006, 09:22 AM

Quote:

Originally Posted by Pleasurepays

i meant by that, that he was busted time and time again for making false, impossible claims, hiring people to post all over the web about what a genius he is and for creating a buzz about the site. its kinda cool that he made a pile of crap famous, but the claims about that site being the biggest adsense site in canada, having xmillion hits per day, making 10K a day with adsense etc are bullshit.

how do you know if he's lying?

vod · 08-30-2006, 08:05 PM

Quote:

Originally Posted by Wizzo

They are in trouble now that http://www.petspaces.com is launched...

hehe

jayeff · 08-30-2006, 08:50 PM

Quote:

Originally Posted by KlenTelaris

I still dont understud why myspace is so popular and friendster not.

It's easy to find detailed differences, but none seem likely to account for the performance gap. I suspect that has a lot more to do with the phenomenon which makes a New York restaurant the place to be seen this month and passé a few months later. And it must be a factor that social networks need a critical mass before they are appealing to their users.

But really, a few here don't seem aware that social networking has probably had more people chasing a popular solution/presentation and for longer than just about anything except maybe micropayments, the other "Holy Grail" of the 'net. I even had a failed shot at it about 7 years ago

The interactivity and potential reach of social networking is such an obvious match for the internet, it's hardly surprising that people are willing to pump money into it. And although MySpace is top of the heap now, it is clunky enough to still be vulnerable.

squishypimp · 08-30-2006, 09:12 PM

they shoulda taken the 50 million before myspace came out

donross · 08-30-2006, 11:46 PM

friendster is more active outside US

Ace_luffy · 08-31-2006, 12:40 AM

thanks for the articles

Joesho · 08-31-2006, 07:12 AM

Quote:

Originally Posted by DEA

myspace is going to go bust in less than 3 years imho

you must of missed the deal announced about a month or so ago....

google and myspace partner up on a venture worth 900 million in revenue to myspace over the next 2 yrs.

Now that is a chunk of change , damn.

08-26-2006, 11:54 AM	#1
XonDemand Confirmed User Join Date: Jun 2006 Posts: 577	Friendster gets $10 million DAG Ventures, Kleiner Perkins and Benchmark Capital have injected another $10 million into Friendster, the first of the social networking systems, after washing out previous value in a $3 million recapitalization earlier this year. I can't imagine to what end. Places you go to join communities are a dying breed, if you ask me. The fluid populations of online communities, which flowed from Friendster to newer models of community, such as Facebook and MySpace, then Relationships are constantly on the move, fragmenting and, most importantly, demanding new investment.on to sites like YouTube, are forever in motion, so what is it an investor is trying to capture? People? If so, then you have to recognize that people move on and the churn rate for a community site, where Friendster has turned over its entire membership at least twice if not five times since 2002, makes any investment in registered users as an asset you can sell?to advertisers or an acquiring company wanting the relationships?an exercise in depreciation. Sooner rather than later you have to write off the investment in acquiring those customers. Let's imagine what $10 million buys today. Well, if it takes $10 to attract a customer, then you've purchased one million customer relationships, at first. After six months, churn brings the number of customers down to, say, 600,000. Of course, it may take much less to attract a customer, but the question is, if winning customers costs nothing and you don't earn any money from them upfront, just how valuable will they be to advertisers? The dream is the demographic Nirvana, where communities collect so much data about the individual that every advertisement becomes a pre-qualified contextually relevant experience and conversion rates soar. But, so far, no one has seen that actually happen. Ad rates at MySpace and YouTube are abysmally low. In 2005, MySpace, which had more page views than Google, earned only about $30 million in revenue compared to Google's $6 billion. The problem with the Nirvana scenario is that no community is a complete picture of the user. Community sites represent demographic slices, which is why the adjective "niche" has been applied to community when venture capitalists talk about success these days. So, one is constantly paying for a fragment of that demographic promised land at full Nirvana value. It's a losing business, because the asset?user relationships?are constantly on the move, fragmenting and, most importantly, demanding new investment. article __________________ 60,000+ DVD Movies Studio / Webmaster ADULT WEBMASTER RESOURCES

08-26-2006, 12:15 PM	#3
WiredGuy Pounding Googlebot Industry Role: Join Date: Aug 2002 Location: Canada Posts: 34,483	Friendster has been a dying breed since MySpace came out. Even though they're playing catchup now, they've lost the battle in my opinion. WG __________________ I play with Google.

08-26-2006, 08:15 PM	#8
Big_Red Confirmed User Join Date: Jun 2006 Location: Do you care? Posts: 4,147	hot damn. __________________ 60% Revshare. http://www.boobycash.com We got the boobs and the cash! ICQ 198-580-197 24/7 support

08-26-2006, 09:04 PM	#11
$5 submissions I help you SUCCEED Industry Role: Join Date: Nov 2003 Location: The Pearl of the Orient Seas Posts: 32,195	Friendster has mostly FOREIGN traffic. Hard to capitalize. Try advertising there (paid or if you know what's up, for free) and you'll see what I mean. There ARE some mainstream products that do well there but they are not very obvious. __________________ Need a NON-ADULT income stream? We build your YOUTUBE CHANNEL for only $20 per video! For Hire: $3/hour or $400 per month Marketing Specialist Virtual Assistants

08-26-2006, 10:42 PM	#13
Fizzgig Registered User Join Date: Feb 2004 Location: In Your Dreams Posts: 9,649	So Plentyoffish.com is a dying breed? __________________ ---'-,-{@ Sassy Grrrl @}-'-,---

08-26-2006, 11:58 AM	#2
elron Confirmed User Join Date: Jul 2003 Posts: 1,553	........

08-26-2006, 12:17 PM	#4
czarina Webmaster Extraordinaire Industry Role: Join Date: Jul 2002 Location: A beautiful beach... Posts: 10,748	I did not know that they were even still around. If they want to catch up, they need to be in the news

08-26-2006, 08:14 PM	#7
Drake Hello world! Industry Role: Join Date: Mar 2003 Posts: 12,508	Great article, thanks for sharing. Based on his hypothesis about Friendster, and the actual dollar amount that MySpace is pulling in, it makes me wonder how long MySpace will be community site king - and if it even pays to be king for this style of site.

08-26-2006, 08:19 PM	#10
bknoob Confirmed User Join Date: Apr 2006 Posts: 1,610	let's not forget friendster owns the social networking patent. Besides, friendster is still huge in foreign countries and should be able to monetize that traffic just fine.

08-26-2006, 11:01 PM	#14
GTS Mark Vrume Mark Industry Role: Join Date: Jan 2001 Location: Toronto, Canada Posts: 20,912	Interesting article thanks for the post DH

08-27-2006, 12:26 AM	#15
c.curtis Registered User Join Date: Aug 2006 Location: Beverly Hills Posts: 30	100 million registered users on myspace, and growing....but is it worth 588 million? no idea!

08-27-2006, 12:58 AM	#16
Drake Hello world! Industry Role: Join Date: Mar 2003 Posts: 12,508	If he's right, we're seeing very strange thing happening. Sites with tons of traffic not having any profit potential? So long as there is traffic, and specifically in the amounts these sites see on a daily basis, money is to be made. Is this an indication that community site simply can't survive over long periods of time in their current format?

08-27-2006, 05:46 AM	#20
DEA - banned for life V.I.P. Join Date: Nov 2004 Location: InYour Head Posts: 7,886	myspace is going to go bust in less than 3 years imho

08-27-2006, 06:16 AM	#21
scottybuzz Too lazy to set a custom title Industry Role: Join Date: May 2006 Location: NY Posts: 14,800	it wont go bust when it is owned by news corp imho __________________ $$$$$ MAKE HUGE MONEY IN CAMS - CLICK HERE $$$$$

08-27-2006, 06:54 AM	#24
Klen Industry Role: Join Date: Aug 2006 Location: Little Vienna Posts: 32,235	I still dont understud why myspace is so popular and friendster not.

08-27-2006, 07:14 AM	#26
Manowar jellyfish Join Date: Dec 2003 Posts: 71,528	friendster are dying

08-27-2006, 08:04 AM	#27
free4porn Confirmed User Join Date: Jun 2005 Posts: 4,654	myspace is the king daddy now __________________ Switch To Fling Now! I'm on 1:201 paid signups sending little traffic! Make $$$ Free Porn

08-28-2006, 08:07 AM	#31
Wizzo 2011 GFY Hall of Fame! Industry Role: Join Date: Nov 2000 Location: Back in Texas! Posts: 15,224	They are in trouble now that http://www.petspaces.com is launched... __________________ Looking for Opportunity!

08-30-2006, 09:12 PM	#36
squishypimp PostMaster General Join Date: Aug 2006 Posts: 10,781	they shoulda taken the 50 million before myspace came out __________________ Signature For Sale

08-30-2006, 11:46 PM	#37
donross Confirmed User Join Date: Aug 2005 Posts: 1,295	friendster is more active outside US __________________ Email: [email protected] \| Skype: ross.alcazar

08-31-2006, 12:40 AM	#38
Ace_luffy www.creationcrew.com Industry Role: Join Date: Feb 2005 Location: CREATIONCREW.COM CREATIONCREW.COM CREATIONCREW.COM CREATIONCREW.COM CREATIONCREW.COM CREATIONCREW.COM Posts: 12,110	thanks for the articles __________________ ++ Adult and Mainstream Websites Designs \| 10 banners for only $50 \| html5 Banners ++ email : [email protected] Telegram : https://t.me/creationcrew \| HTML5/Responsive Site - Div/CSS - ElevatedX - NATs - Wordpress