Friendster undergoes revamp amid buyout talk

Posted at 12/04/09 6:44 PM

Friendster, one of the world's earliest social networking sites, launched Friday a newly revamped look with new logo, tagline and the ability for users to customize their pages amid reports that the site will be sold to an Asian buyer by the end of December.

Calling itself a social network geared specifically at young people, Friendster said the revamp is a way for the site to set itself apart from its "plain and boring" rivals.

A Reuters report said Friendster will be sold to an Asian listed firm for more than $100 million in a deal set to be announced by the end of the month, said a source who declined to be identified as the information was not yet public.

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

Friendster chief executive Richard Kimber told Reuters that Morgan Stanley had been hired to handle the deal. "We have a shortlist at this point that we are negotiating with," Kimber said.

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.

Friendster, which predates Facebook and MySpace in the social networking space was founded in 2002. But it quickly lost ground to other social networking sites in the United States. Friendster is now mostly used in Asia where more than half of its registered 100 million users are from.

Headquartered in California, Friendster had turned down a $30 million buyout offer from Google Inc six years ago, according to newspaper reports.

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. With Reuters