Friendster Moving To Asia, Looking At Virtual Goods

This week word emerged that the pioneering social network Friendster had hired the investment bank Morgan Stanley in hopes of finding an Asian buyer interested in purchasing the company, according to documents obtained by TechCrunch. In addition, the document reveals that Friendster intends to revamp its current business model by adding virtual goods and other new revenue streams to the site. The deal is likely a reaction to Friendster's new users being mostly focused in Southeast Asia while worldwide traffic to the site declines (down 45% year-over-year).

Other new revenue streams Friendster hopes to bring to the social network after a prospective Asian buyout include gaming, surveys, music, a dating service, and classified ads. The documents allege that Friendster's reach into Asian markets is well ahead of Facebook's, with Friendster claiming over 75 million registers users in the region (out of 100 million worldwide). Friendster also claims 100,000 new users added daily as well as over 500 million page views per day. The company's headcount includes 105 employees spread out across four offices located in the United States, Singapore, Australia, and the Philippines.

Rough estimates value Friendster at anywhere from $137 million to $210 million. The company has taken $45 million in venture capital in the past through several rounds of investment that included the firms Benchmark Capital, Battery Ventures, Kleiner Perkins Caulfield & Byers, DAG Ventures, and several angle investors. It is inclear what price Morgan Stanley hopes to get out of a prospective Asian buyer for Friendster. In 2002, the company turned down a $30 million buyout offer from Google.

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