December 5, 2009

Friendster To Be Sold By End Of December

Social networking site Friendster could be sold to an Asian buyer by the end of December, Reuters reported.

According to the report, the deal could be worth at least $100 million.

Friendster, which predates Facebook and MySpace, has about 100 million users -- half of which come from Asia.

TechCrunch, an industry blog, said in July it valued Friendster at $210 million, a fraction of Facebook's estimated $10 billion valuation.

Richard Kimbler, chief executive of Friendster, told Reuters that Morgan Stanley had been hired to handle the deal.

Kimbler says, "We have a shortlist at this point that we are negotiating with."

Friendster, like Facebook, has been struggling to find an effective monetization strategy. The firm rebranded its main website on Friday targeting a younger audience and said it will shift its revenue focus from advertising to micro-transaction.

With headquarters located in California, Friendster turned down a $30 million buyout offer from Google six years ago.

Tencent Holdings, China's largest Internet firm by market value at $35 billion, was among the short-listed bidders, while Facebook also showed interest but was turned down due to competition and intellectual property issues, the source said.

Friendster holds five U.S. patents related to social networking according to the United States Patents and Trademarks Office.


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