Is Friendster better off with MOL?
by Chris Leong
In the last post, i had talked about losing mind share in US. However, Friendster is still very strong in Asia, especially in Malaysia and Philippines. Friendster is the #11 site in Malaysia and #6 in Philippines (Facebook is the #1 in both countries). However they have been losing market share for a long time (Friendster used to be the top site in Malaysia)
So the key question now is, Is Friendster better off with MOL than on their own?
The answer is YES for me on paper. Here are some reasons:
- Friendster can only survive by being a niche social media player. Friendster is strong in Asia but they are still an American company (Australian CEO). So fundamentally, their insights on being a niche Asian Social Media player is limited. Therefore MOL will be able to provide these insights (Especially with Malaysia as one of their strong market)
- MOL is strong in Berjaya Group (Majority owner of MOL) has many B2C businesses like U-Mobile, Hotels and its many F&B Franchise business (Kenny Rogers, Wendy’s ETC. Avenues of monetising Friendster can be easier.
- With MOL already strong in Micro-Transaction, they would have the experience to monetize Friendster’s users. MOL and Friendster shared the same target market.
However, MOL is facing an uphill task. They need to settle down quick. Here are some of my key worries.
- MOL’s strategy of using Micro Transaction, Social Games and Music make sense but execution might be difficult as MOL has no prior experience managing a Web 2.0 company. Can MOL afford to make any rookie mistakes? Can they effectively manage cross culturally?
- Does Berjaya have the vision to stay with Friendster for the long run? Berjaya’s track record with MITV is not exactly fantastic. Will they see enough value in Friendster to invest more money if the goings get tough?
Heard from informed sources that Friendster is still bleeding, that the new CEO is on his rounds to determine how to cut costs towards making the business profitable. The only chance Friendster has is its focus on having the “local touch” via partnerships in go-to-market activities that reaches out to new users and Facebook users to also use Friendster. The thing about being part of a network and the tons of clubs, games on Facebook that is so easy to use/access is a high barrier. All popular culture has taken to Facebook and Twitter as the two defining social media standards – just witness last Friday to Sunday’s Star, New Sunday Times. Nary a mention of Friendster but all on Facebook and Twitter.
Both companies are still in red. I also want to see how Vincent Tan can turn it around to their benefits. Maybe the direct sales business going global will be of use and facilitate the growth.
Yes. I agree. Execution is key.. I’m also waiting for some announcement from them.