Malaysian firm buys Friendster

Posted at 12/10/2009 4:18 PM | Updated as of 12/10/2009 4:18 PM

KUALA LUMPUR - Online social networking pioneer Friendster has accepted a buyout from Malaysia-based MOL Global, the companies announced Thursday, saying the site would shift into e-commerce.

Friendster, which made its debut in 2002, was widely used to share videos, photos and messages before its popularity was challenged by the emergence of mighty competitors like Facebook. Its users are now mostly in Asia.

Under the new deal, the California-based Friendster will be fully acquired by MOL Global, an affiliate of online payment firm MOL Access Portal which is controlled by Malaysian tycoon Vincent Tan, they said in a statement.

The purchase price was not disclosed.

"The new combined entity gives Friendster the kind of financial backing, retail distribution, and e-commerce infrastructure that will enable us to accelerate our strategy," Friendster chief executive Richard Kimber said.

With over 75 million registered users, Friendster said 90 percent of its daily traffic comes from Asia, while MOL has over 500,000 physical and virtual channels in 75 countries to collect payment for content and services.

MOL chief executive Ganesh Kumar Bangah said the merger will allow the site to transform into a combined "social media site and online marketing channel with an integrated payment platform" that also offers games, goods and music.

The deal came after the two companies entered a partnership in October where MOL was appointed to provide an integrated payment platform for Friendster's e-commerce services.

The two services, The Friendster Wallet and The Friendster Gift Shop, allow users of the site to buy virtual gifts for their friends.

The new entity will build on those services to enable "a wide array of content to be distributed to Friendster's community and monetize via micro-transactions using MOL's payment platform", the statement said.

Apart from MOL, Tan also has property, leisure, gaming and financial interests under his Berjaya Group conglomerate.

He holds retail franchises in Malaysia and across Southeast Asia for 7-Eleven, Starbucks, bookstore Borders and McDonald's among others.