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Friendster

Shut down · 2018

The original social network, which turned down a $30 million Google acquisition offer in 2003 and then lost its users to slow page loads, MySpace, and Facebook.

Mountain View, USA2002–2018

Key metrics

$53M

Total funding

$53M

Peak valuation

1

Funding rounds

Outcome

Shut down

Operations ended in 2018.

Sold to Malaysian internet company MOL Global in December 2009 for a total purchase price of $39.5 million (roughly $26.4 million to shareholders after debt and fees were deducted) — a steep decline from the $53 million valuation Friendster had commanded at its funding peak six years earlier, and a fraction of the $30 million Google had once offered when Friendster was worth far less. MOL pivoted Friendster into a social gaming and rewards platform in 2011; the company suspended services in June 2015 and ceased trading entirely by 2018.

2018

The Story

Founded

Series A (Kleiner Perkins, Benchmark)

$53M

Shut down

What worked

Friendster pioneered the core mechanics that would define social networking for the next two decades — friend connections, profiles, and a social graph — growing so fast in its first year that it became the most-talked-about startup in Silicon Valley and drew a $30 million acquisition offer from Google in 2003, just a year after founding, which founder Jonathan Abrams turned down believing the company was worth more on its own.

What didn't work

  1. 01

    Friendster's own success became its undoing

    User growth far outpaced the company's server and database infrastructure, and pages that should have loaded instantly began taking 20 to 40 seconds — an experience that drove users toward newer competitors offering a faster, smoother experience, first MySpace and then Facebook.

  2. 02

    Turning down Google's 2003 acquisition offer meant Friendster bet on scaling those technical problems away independently; it never fully did, and by the mid-2000s its user base had migrated almost entirely elsewhere.

  3. 03

    The company limped on for years afterward, was sold to Malaysian firm MOL Global in 2009 for a fraction of its earlier valuation, pivoted to social gaming, and ceased operating entirely by 2018.

Execution FlawsOutcompeted by IncumbentsTiming (Too Early/Late)

THE VENTURE TRAIL TAKE

Winning the early growth race is worthless if the product can't stay fast under its own success — users migrate to a smoother competitor long before the underlying business actually fails.

Read the full postmortem

Company details

Business model
D2C Subscription
Founded
2002
Headquarters
Mountain View, USA
Funding rounds
1
Investors
Kleiner Perkins · Benchmark
Peak valuation
$53M

Founder

Jonathan Abrams
Founder & CEO

Sources

  1. 01TechCrunchFriendster Valued At Just $26.4 Million In Sale
  2. 02TechCrunchMalaysian Payments Company MOL Global Snaps Up Friendster
  3. 03NetimperativeInterview with Jonathan Abrams: The man who rejected a $30m sale of Friendster to Google

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