Peter Kafka

Recent Posts by Peter Kafka

Friendster’s Cautionary Tale Ends in $100 Million Sale

armadillos one hit wonders webThere aren’t a lot of start-up stories in which a nine-figure sale is considered a bummer, but this is one of them: Friendster, the site that once defined social networking, has been sold to Malaysia’s MOL Global at a fraction of its old value.

In case you don’t remember, Friendster was once the buzziest of start-ups. And in 2003, when Facebook’s Mark Zuckerberg was still in high school and Twitter’s Evan Williams was still working on Blogger, the company turned down a $30 million offer from Google (GOOG).

That deal would be well worth more than $1 billion today. But reports peg MOL’s purchase price at about $100 million.

Today, Friendster’s primary role is that of a cautionary tale for Webby start-ups: Look what happens if you miss your window. “I don’t want to be another Friendster” is a well-worn cliché that still has resonance, and I heard it just the other week while sitting in the office of an Internet CEO whose company may be on the block soon.

Looking for a more positive spin this morning? Okay, try this: Friendster’s sale represents the Internet’s power to reinvent companies. Even though no one you know uses the site, it never went away, and it has quietly amassed a reported 100 million users, almost all of them in Asia.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik