Malaysian Company Acquires Friendster, Bets on Micropayments
Social networking site Friendster accepted a buyout offer from Malaysia's MOL Global, which hopes to generate revenue from the site using micropayments.
One of the first social networking sites, Friendster was among the most popular Internet sites before it was eclipsed by new entrants, including Facebook and MySpace. While Friendster eventually lost traction among users in most major markets, the company remained popular in Southeast Asia.
Friendster says 90 percent of its traffic comes from Asia. In August, the site had 20 million active users from Malaysia, Singapore, Indonesia and the Philippines.
MOL and Friendster, which is privately held, did not disclose financial terms of the acquisition deal.
The buyout extends a partnership between the two companies, announced in October. Under the terms of that deal, MOL will provide a payment platform for Friendster's e-commerce services, Friendster Wallet and Friendster Gift Shop, where users can buy virtual gifts for friends.
Friendster Wallet allows users to make purchases at the online Gift Shop using virtual currency. Users buy the virtual currency, called Friendster Coins, using top-up cards sold at physical shops, such as convenience stores.
"The new combined entity will now build upon that initial set of products to deliver a content distribution network and e-commerce platform," the companies said in a statement.
In addition, MOL plans to use the other business interests of its main shareholder to attract more users to Friendster. Those businesses include franchises in Malaysia and other parts of Southeast Asia for Starbucks, 7-Eleven, Borders, Krispy Kreme, Wendy's, and Papa John's Pizza, the statement said.