Friendster on the verge of $100 million buyout?

by Stevie Smith - Dec 4 2009, 06:45

Friendster may be one of the Internet’s oldest social networks, but mammoth growth attributed to the likes of Facebook, MySpace and Bebo have kept the service in the shadows. Now, if whispers are to be believed, Friendster will soon be sold on in the face of insurmountable competition.

Citing sources familiar with the matter, the Reuters news agency reports that an unnamed Asian buyer is expected to acquire the network, which was founded in 2002, for around $100 million USD before the close of December.

Despite that valuation falling well short of the estimated $10 billion USD placed upon market leading social network Facebook, Friendster still carries with it a formidable user base of around 100 million – the vast majority of which is based in Asia.

According to the unnamed source, there is currently a shortlist of buyers angling for a potential purchase, the most notable of which is Chinese online giant Tencent Holdings, which holds a market valuation of some $35 billion USD.

Rival service Facebook was also once associated with a possible buyout of Friendster, although apparently the deal never came to fruition due to conflicting issues connected to intellectual properties and competition. Reports also suggest Friendster rebuffed a $30 million offer from search giant Google in 2006.

News of the impending purchase comes in the same week Friendster announced a sweeping redesign to its official Web site, an increased focus on the Asian youth market, and a revenue shift from advertising to micro transactions.

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