In the midst of its decline, online social network Friendster has made attempts to increase its waning popularity through methods that have not been received well by some. Friendster said that the company recently kicked off a “reminder” promotion policy approximately seven months ago. The campaign called for Friendster to notify people who did not respond to their friends’ invitations to join the network after three to seven days to serve as a reminder.
About two weeks ago, Friendster furthered this effort by pulling up e-mail addresses of people who did not respond to their friends’ invitations over a year ago. The mass e-mails were sent under the allusion that they were coming from their friends, when in reality they were being sent by Friendster.
Many recipients of these e-mails are claiming that Friendster’s tactics should not be considered to be just mass e-mailing, but spam. Friendster spokesman Jeff Roberto denies this and says that the San Francisco-based company is “not in the business of spamming.” Roberto says that they initiated this campaign in order to reach people who were invited by their friends but never received the invitation e-mail due to technical difficulties on the site. The e-mails were also designed to inform people about Friendster’s new features, including blogs, video, and file sharing in hopes of increasing traffic. Roberto says that the results have thus far been positive, with traffic seeing upward movement, and that those who received the e-mails have plenty of chances to opt out of receiving e-mail from Friendster.
Regardless of Friendster’s stance on the issue, it’s apparent that all of this is an indication of Friendster’s fall from grace, primarily due to News Corp. arm MySpace.com.
Friendster was started in 2002 and was one of the earlier and more popular online social networks. Since then Friendster has encountered trouble and increasingly strong competition as it has failed in establishing a sound business model.
MySpace was also founded in 2002, and was targeted at the Los Angeles music scene. It has since become an important outlet for bands who debut their albums on their MySpace site and for A&R representatives who look for new talent in the network. MySpace has also become wildly popular among people between the ages of 14 and 20, and has accumulated about 33 million members in two years.
According to Nielsen NetRatings, since September of last year MySpace has seen its unique visitors per month increase 840%, from 1.85 million to 17.47 million unique visitors per month. Friendster reached its peak between September 2003 and March 2004, when it attracted more than 1 million unique visitors per month. Since then Friendster’s traffic has plummeted to approximately half of that number. It drew 585,000 unique visitors in September.
Consequently, MySpace has seen ad spending skyrocket from about $1.9 million in September 2004 to $36.69 million in September 2005, according to AdRelevance estimates. Meanwhile, Friendster’s ad spending fell from $192,800 to $161,700 during the same time period.
In response to all of this, Friendster has spent the past year repositioning itself as more of a dating site while also adding features such as blogs and photo sharing. However, according to sources familiar with the issue, it seems that Friendster is seeking other outs as well.
According to sources, Friendster has hired Montgomery & Co., a boutique investment banking firm in Santa Monica, California, to find someone interested in buying the company.
Earlier this year, Friendster reportedly looked around for a buyer who would take on the requested selling price of around $200 million. Since then the price has been lowered to the $50-100 million range.
It seems that Friendster’s latest stir in the Internet community is only a sign of their desperation as it tries to fend off MySpace. Now it remains to be seen whether or not Friendster will continue on their path in hopes of becoming a contender in the highly competitive dating and personals segment, or if they will try to find themselves a suitable buyer.
Sources:
http://news.com.com/Friendster+overture+not+
endearing+to+all/2100-1038_3-5942893.html
http://news.com.com/Is+Friendster+up+for+sale/
2100-1038_3-5951910.html?tag=nefd.top
http://www.webpronews.com/topnews/topnews/wpn-
60-20051115FriendsterSeeksATakeoverFriend.html
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