Friendster up for salester
Word is that Friendster is up for sale. Is this any surprise? This has been troubled for over a year
. Although calculations below suggest a profit may be made on this deal, thanks to Friendster's popularity in some Asian countries
Troubled social networking site Friendster has hired Montgomery & Co., a boutique investment banking firm in Santa Monica, Calif., to find a buyer.
Earlier this year, Friendster was shopping for a buyer, and according to the story, it was looking for a sale price in the ballpark of $200 million. Now its price has been lowered to the range of $50 million to $100 million. If my calculations are correct, Friendster has about $11 million pumped into it and could be as high as $15 million. (from Rafat)
UPDATE: Tom reminds us in comments below that Friendster rejected Google's offer to buy it for $30M million back in Oct 2003 (we wrote about here). Friendster, by locking into low-priced pre-IPO Google stock, would now be worth about $150-$350M, based on 5-10x share price rise since then, which is ballpark estimate. And would be liquid, cold cash now too. Youch!
TrackBack URL for this entry:
Links to blogs that reference this entry:
From: Turnkey Online Business
Turnkey Online Business
To Important: Welcome to an actual webpage does all 8 turnkey businesses available. You Know That way, orde...
February 21, 2006 11:46 PM
From: Dating Online
Someone who can feel the wonderPrescription4Love, LLC launched its Web Site today; www.prescription4love.com/ is an onli...
July 27, 2006 8:26 PM
Can someone in the know, please confirm this: Didn't Google make a serious offer to buy Friendster pre-IPO? I believe it was in the range of $35 million? Let's say they offered Google stock, and since then the price has gone up 5-10x. That means they walked away from $175-$350 million bucks in Google stock (and they would have had the liquidity for over a year now). With earnouts and the Google brand behind them, God knows what it could have been.
Ps. Compare that with the Flikr folks who took the $35 million from Yahoo.
Thanks Tom, for reminder. Just confirmed, with update on post.
It seems Friendster is now getting only 500k uniques a month. Even i own sites which generate more traffic than that :). It would be really insane if anyone buy it at 50 million or so! ...
Guys, where are your cajones?
I mean, really -- how about pointing out that none other than John Doerr was shooting his mouth off in Jan/Feb, that Friendster was "going to be profitable in N days". I forget the exact timeframe but it would have had them PFP by April, which of course, we all knew was a serious long shot, with Scott Sassa there busy firing the only competent people that hadn't already quit...
Why does Doerr (et al) get a free pass on this sh*t when these things start to tank? I'd like to think that everyone has to start paying the credibility debt at some point...
Any thoughts on how much Friendster is making in terms of annual revenue?
Benjamin> VCs sometimes make large bets and fail. That comes with the territory. And they may have been negotiating a large deal that fell through. Just check how many billions of dollars of net profit Doerr has generated for his LPs. That is the ultimate credibility metric for a VC.
And my understanding is that Friendster got the Google offer before the KP/Benchmark/Battery $13M round - after taking less than $2M in financing.
Sure Doerr lucked out in a few big deals... so made a good name. But so could anyone if you look at the VC (or any investing model). By vurtue of basic probability, some VCs will be outliers... so good for John Doerr. I don't think he is much smarter or better than you and I... just luckier... certainly most VCs do not deserve the attitude they carry themselves with...
In the Friendster case, the VCs' key mistake was to fire the initial/old team to bring in their execs (Sassa) who did not understand the technology. So they lost the key people when they were growing too rapidly... and the site became slow. Went down. And every one flocked to MySpace. It's that simple...
So bad move on VC's part for firing the initial team...
It really comes down to a lack of execution. They had and still do have a lot of potential if they refine and refocus their business model.
I can tell you from first hand experience, venture capitals care more about eyeballs than monetization, sounds like the dot com days all over again. We just meet with 11 VCs two weeks ago.
I had a few shouting matches in San Francisco with a few of them, not politically correct, but I like to get my point across that 100% FREE USERS DO NOT PAY THE OVERHEAD TO RUN A SOCIAL NETWORK.
Myspace on the other hand executed very well, by taking advantage of FriendsterÔs disorganization and slowness of management to react. Yet, MySpace has its issues to, making more money than its spending.
Well just my two cents, JM
DateApp FREE Online Dating Software
DateApp provides Webmasters with a TURNKEY Online Dating Software Scripts has been the basis of our success. Unlike stand alone dating software packages or old-fashioned dating affiliate programs, our dating management software, helps you create a fully seeded, personalized, and hosted dating site. This dating script includes chat, video, picture profiles, SMS, member search, admin, and billing by DateApp. Since 2005,we have launched over 3,000 dating and social networks.
Would like to know where i can find the corporate inforamation for Friendster....? Can anyone help?
Its price raised 5 times for the last three years. Even if to take into consideration inflation rate it's a great rate.