Friendster reveals acquisition plans amid site relaunch

According to reports, Friendster’s CEO Richard Kimber says the company is in the process of negotiating with a handful of primarily Asian buyers. Chinese powerhouse Tencent has been named as one of Friendster’s top suitors. Report rules out Facebook as a bidding contender due to hurdles related to competition and intellectual property rights.

News of Friendster’s acquisition intentions first surfaced in July. At the time, a source at Friendster confirmed to Media that TechCrunch, which first reported the story, had seen “a very fact-based document” issued by Friendster and Morgan Stanley, which was enlisted to help with the process. That article noted that Friendster sought a buyer looking to gain quick access to the Asian social networking scene – a proposition that could be tempting for a company like Tencent, which has a dominant hold on the Chinese internet market but has little presence outside the mainland.

Approximately 90 per cent of Friendster’s user base is in Asia, and is a leading SNS in Southeast Asia, especially dominant in the Philippines, Malaysia, Indonesia and Singapore. Its target user is between the ages of 16 and 24.

Because of its ongoing success in Asia, Friendster relocated its full operations to Southeast Asia earlier this year to better maintain its hold on the region. “Ninety per cent of our users are in Asia so this is really where we need to be and this is where the heart of the company is,” Friendster’s head of Asia Ian Stewart said in May, adding that Friendster had 45 million active users in Southeast Asia. “The way it’s mapped out, the brain of the company is in Singapore, our work is in Manila and our technical centre of excellence, with the servers and technological base, is in San Francisco.”

The company’s CEO Richard Kimber is based in Sydney.

In response to the news regarding Friendster’s sale, a source close to the company said a deal is “in the works” but added that reports regarding the specifics of the deal were erroneous. The source declined to note which parts of the news were inaccurate but said further announcements would be revealed in the coming weeks.

The news surfaced the same day that Friendster unveiled the relaunch of its website, logo and brand slogan.

The company’s overarching goal – which was originally voiced in May, when Friendster announced that its intention to become an “Asian site for Asian people” – was to shift from a singularly networking domain into an entertainment space. According to Stewart, the site has been redesigned because Friendster’s services have been modernised in the last few months and have more accurately become a domain catering to Southeast Asian users, and for this, a new look was in order.

“We’re still so keen to create a local feel and culture, and we’re achieving that through local partners ranging from telcos through to record labels and management companies and promoters and tickets venders,” Stewart said of the site’s goals. “We’re not looking to add hundreds of things but a handful of things that address trends in social media, such as gifting, gaming and entertainment. We’ve found suppliers and advertising partners and are working on the ground to maintain our position, and we’ve chosen a new design direction that we thought would make the most people happy, and we really believe we’ve done that.”

Among Friendster’s changes is the adoption of easier site navigation; entertainment and gaming features; services that allow users to better personalize their Friendster profiles, homepages and navigation; easier ways to share photos; and a new Friendster Gift Shop, which allows users to purchase gifts through micropayments via Friendster’s Virtual Wallet.

“Our new brand is just one of the ways we are communicating the evolution of our business as well as our commitment to our users - they’ve given us great feedback and we’ve listened,” said Kimber. “We understand our users and our major markets in Asia better than anyone. This is just the beginning of a series of new products and services catering to the needs of our users, and in a way unmatched by any other social network.”

Stewart added that Friendster conducted in-depth research on its audience’s preferences in order to revamp the site. To further create a fresher feel, Friendster changed its logo from its original, blue-smiley image to a green logo. “It was the users who told us the interpretation of the green smiley – it’s fresh and modern and a different coluor from others in the social networking space. It’s been received extremely well,” he said.

To build off of Friendster’s iconic smiley, the site also adopted the slogan “Connecting Smiles”.

According to a source close to Friendster, the site’s refurbishment was not fully intended to help the company catch a higher acquisition price, but was instead initiated to better modernise its operations in the face of rising competition.

Although Friendster is a leading player in the SNS landscape in Asia, the growing popularity of Facebook has put pressure on the site. In July, Alexa puts Facebook ahead of Friendster in terms of current usage in Malaysia, Indonesia and Singapore, while Hitwise figures for Singapore also showed Facebook to be more popular. ComScore data, meanwhile, suggested Facebook usage has tripled in the last year in Malaysia. It was only in the Philippines that Friendster maintained a clear lead.

Facebook additionally introduced its Lite version earlier this year, which acts as a simplified version of the site that will be more accessible on mobile phones and in markets where bandwidth is slow – an integral development to users in mobile-rich markets such as Indonesia.

Friendster claims more than 115 million registered users worldwide and serves 9 billion pages a month. Users spend approximately 110 minutes on the site per month and more than 100,000 users register for Friendster daily.