A Bad Business Decision Thread: In 2003, Google offered to buy Friendster for $30MM
 

in Pre-IPO stock. 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 hit nearly $500 per share.

http://www.findarticles.com/p/articl.../ai_kepm358716

had they taken that offer, they would be worth something like $2.5 Billion

recently they asked Viacom to buy them for $5,000,000. Viacom rejected the offer.

http://www.paidcontent.org/pc/arch/2...1.shtml#053107

damn.

anyone else have bad business decision stories - your own or otherwise?

hah. I always hated friendster.

allowing bands to promote themselves really let MySpace grow rapidly in that market. now they got bought for $500 Million. friendster didn't allow this. friendster should have been more liberal in their profile polices.

so google launched orkut instead - how come it never took off? (except in brazil)

I belive the biggest reason for that no taking off is the name

Agreed, sounds more like a disease or some obscure, small jungle animal with no genetic belongings to any other species.

This sounds like what happened to Mark Cuban...only Mark took the money for Broadcast.com :)

Jim

fuckin' a. people say 'oh he was just lucky'. my ass. he knew when to sell. that's not luck.

there's bad and then there's just downright idiotic. they're gonna have to transform the site somehow to maximize value. weird the VC firm didn't assist them in a transition to at least get some chance of a return.

and he bought options for when the stock he recieved tanked. he goes against the herd and made a killing, far from luck.

it will be interesting to see what happens with his HDTV company. content content content.

there's a major shift going on in the whole 'social networking' thing from relationship-networking to 'shared interest' networking. you can see that with Yahoo's recent buys. http://del.icio.us/ and http://webjay.org/. To me, it makes more sense to network people via shared interest rather than relationships. or even better, a combination of the two. myspace is doing a pretty good job of leveraging its membership base, even though most of the sites on myspace look worse than Geocities circa 1996.

bad business decision bump

I saw a blog post somewhere that Friendster's recent valuation put it at about $3million. In the meantime, venture capitalists are still pouring millions into it.

I don't think I've ever visited friendster once

is this true? i haven't seen any recent news about friendster raising any money.

friendster pheers myspace.

friendster is gay anyway myspace is better... facebook is more popular than friendster now a days...

combine the two and you could have a winner

I thought friendster was the asian myspace? ;)

Here is the story I read about friendster's valuation:
http://www.techcrunch.com/2006/02/02...recapitalized/

"The rumor floating around over the last week, which I?ve heard from multiple sources close to Kleiner Perkins, is that the fund has stepped in to stop a shutdown. They have injected limited additional funds (I?ve heard numbers between $5 million and $12 million) and have restructured the capitalization of the company to heavily favor their fund (this would be customary in a recapitalization)."

massive dilution.

imagine had they taken the pre-ipo GOOG stock.

thanks for the link. i usually check that site daily, but missed today.

Abrams must be kicking himself

bad move for sure

Friendster is going down for sure

i'm sure he is now that his equity is diluted

oh my gosh. i hate to bare this - i have a friendster account. it's good, though.

as they should