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Friendster Acquired by Malaysia's MOL Global

The social network will focus on the Asian market where it is still very powerful

Dec 10, 2009 10:51 GMT  ·  By
Friendster will focus on the Asian market where it is still very powerful
   Friendster will focus on the Asian market where it is still very powerful

Friendster, the social network which set things off more than half a decade ago has finally been sold after several attempts in the past years. As expected, the social network was snatched up by an Asian company, MOL Global, a Malaysian e-commerce and payments company for an unreported sum which some put at about $100 million. MOL Global will take over 100 percent ownership of Friendster and hopes to bolster the social network's position in the Asia-Pacific region where it's a very strong player dominating the market.

"Friendster and MOL are both industry pioneers and are close partners. This combination is a natural progression of our relationship and will be an industry-changing event," Richard Kimber, Friendster CEO, said. "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 and create a locally relevant, fun experience for our users in Asia, both on and offline."

The acquisition was officially announced yesterday and MOL Global CEO Ganesh Kumar Bangah was confident of the social networks potential and in the opportunities created by the merger of the two businesses which are expected to build off of each other. The CEO said he expected the acquisition to add about $110 million to the bottom line a year from now though the forecast may be a little optimistic. If he can pull it off though the reported acquisition price of $100 million suddenly looks like a bargain.

Friendster and MOL Global already work together and Friendster Wallet, the social network's virtual currency system is powered by the payments company's technology. The two are now expected to take that partnership even further with payments becoming an integral part of the social network. Friendster has raised $45 million in investments so far though it was valued a lot more than what it got now at some point. It also holds several social networking patents which could mean an extra revenue source for the company. The site also got a major redesign recently with a clear focus on its new core audience in the Asia-Pacific region.