How Friendster Works

Competition and Future of Friendster

Despite essentially starting the social networking boom, Friendster has had a tough time in the industry. Like most non-subscription-based Web sites and social networks, Friendster aims to make money by selling advertising to companies who want to reach their users. But as of June 2007, Friendster still hasn't posted a profit, though it says it is close [source: Marshall].

In addition, as we mentioned in the introduction of this article, competitors like Facebook and Bebo have won over larger and younger fan bases. In 2003, MySpace blew past Friendster in the U.S. 18-29 age demographic [source: Rivlin]. Several factors may be to blame:

  • Dead ends. Before the rise of interactive applications, there was nothing to do after you set up your profile, limiting incentive to return often.
  • Small scale. Compared to MySpace, Friendster had more limited access to viewing profiles.
  • Lack of vision. Users balked when "Fakester" profiles were removed. Those fake profiles would become groups on MySpace and eventually Fan Profiles on Friendster.
  • Inferior technology. Industry insiders speculate the infrastructure couldn't handle the massive influx of users, causing technical glitches from too-slow page loads to frequent site outages that drove users away.

Can this maligned community recapture the magic? It may already have in Asia. According to TIME magazine, 89 percent of Friendster's traffic comes from Asia, while less than 10 percent of MySpace and Facebook users live there [source: Liu]. In fact, Friendster is the no. 1 social network in Asia, as of the date this article was written, according to comScore Media Metrix. Further expansion into China and other Asian markets is not far off, though Friendster isn't alone in tapping those wells.

By targeting the 18+ demographic and providing what it calls a "clean environment" (read: a less cluttered interface than MySpace), Friendster can focus on older users who may feel more comfortable with less flash. Applications such as quizzes and games help keep them coming back for more, and planned features like mobile texting aim to expand Friendster's reach into new markets and technologies.

The site has also improved technically and beefed up its efforts at getting page views. The aforementioned page load and outage issues have lessened, and it's easier to see who's in your network and how you're connected with a new and improved family tree "graph server" feature. E-mail notifications and live profile updates for new messages and friend activity generate more page views. Friendster reps say these upgrades are why the site's numbers jumped 40 percent in one month [source: Marshall].

Perhaps the most aggressive move Friendster has made toward redemption is opening its platform to application developers. This means that developers will have increased access and flexibility within the site, making it much easier to create rich, flashy applications that will still work with those that currently exist. Further tempting developers and their fan-drawing widgets, Friendster also announced it will not require revenue-sharing on those applications [source: Havenstein]. Some say it's too little too late, but in the end, it will likely come down to who draws the best, most popular applications.

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