Friendster explains monetization plans

Social network pioneer will bring together social networking platform, games and location-based services as part of company's plan to monetize service, according to MOL Global CEO.

As part of its efforts to better monetize its services, Friendster is looking to expand its brand beyond just a social networking site to one that encompasses games and location-based services.

In an interview with ZDNet Asia, MOL Global CEO Ganesh Kumar Bangah highlighted social networks, social games and location-based services (LBS) as three key areas of growth, noting that the company now wants to bring these elements together and expand Friendster beyond just a social network. A Malaysia-based payments company, MOL acquired Friendster last December.

Pointing to Facebook, Zynga and Groupon as currently the biggest players in the three respective segments, Bangah noted that while the three Internet companies operate in different areas, they rely on each other to monetize monetizing their business.

Facebook's revenue comes from advertisements and both Zynga and Groupon are big advertisers on the social network, he explained. But while the two players spend on Facebook, they also make money from Facebook users, he added.

Friendster can "fit into the middle" of the three areas, he said, noting that MOL is already involved in e-payments and micro-transactions for online games. The company processes about 60 million transactions a year with an annual payment volume of over US$200 million, according to MOL.

As part of its efforts to drive the new strategy, the social networking site recently launched a social games portal, dubbed Friendster Games, which offers free MMO (massively multiplayer online) Web-based games to Friendster users.

To fill the LBS gap, the company in July this year unveiled Friendster iCafe--previously branded MOL iCafe--and Friendster WiFi. A cybercafe management software by MOL, Friendster iCafe allows cybercafe owners to administer computers, customers, user accounts and billing requirements. Bangah said the software is offered for free, so Friendster uses the platform to promote its games on computers running the software and encourage users to visit the social networking site.

Friendster WiFi is a free wireless service available at Starbucks, Kenny Rogers, Wendy's and Krispy Kreme stores in Malaysia. MOL provides the necessary equipment for these outlets to provide Wi-Fi access and shares advertising revenue with the participating stores.

To encourage users to visit Friendster, store patrons who surf via Friendster WiFi will be greeted with relevant messages about Friendster Games, for example, information about their friends who have played Friendster games, explained Bangah.

He did not elaborate on how the company plans to launch a service similar to Groupon's daily deal Web site, but said he believes MOL will be able to compete with existing daily deal players by leveraging its member base.

"Traffic...and member base are key when launching new services," Bangah said. "We have the key ingredients to make a Groupon-like service successful here. We know our member base and the friends of the members."

He stressed that MOL does not share user data with advertisers, and will instead match data to the user's stated preferences and push related information to the user.

Asked if the Friendster user base has grown since its facelift and the MOL acquisition, Bangah said the company only took over the site for about eight-and-a-half months and it is still too early to demonstrate any concrete results.

"I would say the execution [of the brand] has been good, but it takes time to show results," he said. "The Internet is not like setting up a coffee shop and people immediately come in and buy coffee."

"It took me three years to scale up MOL so eight months is still a short time," he noted.

MOL last week announced plans to invest US$2 million in marketing campaigns to promote its virtual currency MOL Points, with half of the investment dedicated to advertising on Facebook.