Friendster doesn't deny possible Asian buyout

Social networking site skirts rumors surrounding prospect of acquisition by Asian company. Facebook reportedly turned down due to "competition".
Written by Victoria Ho, Contributor on

Friendster is skirting rumors that the social networking site will be bought out by an Asian company by year-end.

Following the company's announcement last week regarding plans to tweak its strategy to target youths, a Reuters report surfaced over the weekend stating that Friendster would soon be sold to "an Asian buyer by month's end".

Quoting Friendster CEO Richard Kimber, the report said the acquisition is currently being sorted out, with Morgan Stanley hired to handle the deal.

Friendster head of Asia, Ian Stewart, told ZDNet Asia in an e-mail that there were "inaccuracies" in the Reuters article and said he did not want to comment on speculation. He did not, however, directly deny rumors about the imminent acquisition.

Stewart said: "Friendster continues to attract investors... We are still Friendster, we have just modernized the brand and site--we are simply changing our visual look to reflect our personality."

According to reports, the social networking site was valued at US$210 million earlier this year. Reuters named China's Tencent Holdings as a shortlisted buyer, while Facebook's bid was turned down due to "competition".

Friendster's recent facelift involved a number of new monetization strategies focusing on micro-transactions for e-gifts and ad-driven integration with music labels.

The prospect of a buyout by an Asian buyer may not surprise many, particularly since the social networking site has been pushing its pro-Asia message due to its apparent popularity in the region. It claimed earlier this year that 80 percent of its subscriber base comes from Asia, in particular, countries such as the Philippines, Indonesia and Malaysia.

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