SNW INTERVIEW -- Mar 8 -- Friendster is making a comeback with Kent Lindstrom at the helm.
Here's our interview with the CEO of Friendster. He was one of the
earliest investors, and took over from a line of CEO's to bring
stability to the mother of social networks, Friendster.com. - Mark Brooks
You’ve been with Friendster for almost 5 years, almost from day one. How has Friendster and social networking changed in that time?
Pretty dramatically. When Friendster started, social networking did not exist. Friendster was the pioneer, and at the time it was very much thought to be a fad. Then the market exploded. Over the ensuing 4 to 5 years, it grew to the point where several of the top 20 websites on the planet are social networks. However, a year or two ago people thought there were going to be thousands of social networks launching and doing well. Since then, the field has narrowed to 4 to 6 global networks.
When do you see the market stabilizing and what will separate the leaders from the also rans?
I think we have a few years to run on this. Right now a little less then 20% of the internet population maintains a social networking profile. We think its going to end up being closer to 50 or 60%. The real key to social networks has always been the group of people that are on any given social network. So if you look at Friendster, we have 34 million unique users who visit our site each month. They’re deeply engaged and they average 200 minutes per month on Friendster. Compare that to something that people think is addictive like You Tube, where the average is 97 minutes per month. So we think there is still a lot of growth - at least a doubling or tripling of the market. I also think you’re going to see social networks start taking on the features of some of the major portals.
Is social network penetration age dependent?
Yes. There’s definitely a life cycle for how people use social networks. If you start with a teenage audience, they’re very much using social networks to express themselves. They change their profile every other day. Who they make their friends or who they are a fan of, reflects who they are.
In college, it’s very much a practical tool and a way of managing day-to-day life. You don’t want to miss anything, so you update your friends every time you make a move.
And then, as people get older they don’t really need to self-express and they’re too busy to keep people updated every second. Instead, they use it as a way of not losing touch. This is where people say, “Wow I rediscovered my old college friend”, or “I’ve got 50 people I never have time to keep up with, and they’re spread all over the world, but it’s a good way to keep in touch with them.”
The last area where you’re going to see more penetration is among people who haven’t used any social network. After 5 years and 100 invitations to social networks, some of these later adopters are going to say, “Okay, I guess I better take a look at what’s going on here and start joining”.
What separates Friendster from the other social networks?
If you look at the world, there are 6 big remaining social networks. We’re one of the 3 independents, the ones who aren’t owned by big corporations like Google or News Corp. We are very much focused on Asia and all things connected to Asia. We vectored out of San Francisco, and as a result of that, we became very big across Asia and the Asia Pacific where if you look at ComScore data, we are ranked number one - basically twice aas big as any other social network. One thing that is interesting about Asia, and the markets that we’re big in particular, is these are hugely mobile communities. Places like Malaysia, Singapore and the Philippines have large ex-pat communities globally. As these people move around the world, it makes something like Friendster a very compelling way to keep in touch with friends and family.
Are you also targeting Asians within the US?
Yes, absolutely. And we do that in a number of ways. First, we have a fan profile program which is a way for people to connect to celebrities. We recently launched this and over 10 million fans are connected to thousands of different celebrities, many of which are Asian influenced. We focus on bringing in celebrities that resonate in those markets. The content that our users aggregate around - better in some respects - but more accessible for developers in Asia since we make sure that Chinese developers have documentation in Chinese, the support they need, etc. Finally, since late September last year, we've launched the site in traditional and simplified Chinese, Japanese and Korean - which helps Asian in the US and around the world use Friendster in one of those languages if they want, and to use the site with friends or family who might not know English.
You mentioned the fan profiles. Can you elaborate a little on that?
Yes. What happened early on in Friendster was that people would hit the friend limit of 5,000 and then they would create another profile. It turns out that people didn’t really have 15,000 friends, they had 15,000 fans. So since people were looking for ways to manage a base of fans, we gave them a platform for doing it. Karen Kong, a singer in Malaysia, now has 156,000 fans and growing on Friendster. So do US bands like Fall Out Boy who are very popular in Asia.
So if you’re a celebrity or somebody who wants to connect with fan base, such as an artist, an athlete, a restaurant, a club, a politician, etc., we give you a viral platform that gives you a way to enhance visibility; a way to send email, and build a fan base - all with features like unlimited fans and auto-accepting fan requests.
Friendster was one of the first and most popular social networks. Then MySpace came around and then Facebook. Is there another big thing after Facebook?
There is always another big thing, but I think we’ve gotten to a point where it appears things have stabilized. The "big three" social networks you just mentioned have been around for a while and continue to grow. But, in the last couple of years, none of the hundreds new social networks, including those launched by deep-pocketed public companies, have broken into that top group. To the extent where somebody comes up with an innovation, the other players now have the resources and the focus to quickly grab the new idea and incorporate it. So I’m not sure if anything really new and big is going to emerge.
The revenue model for social networking has traditionally been advertising. Yet, people complain about low click through rates. Going forward do you see social networks relying on advertising to generate revenue?
We know that the time that used to be spent watching TV has moved to the Internet, and the time on the Internet has moved to social networks. So everybody is drawing the same conclusion - that somehow the advertising dollars have to shift over. Nobody has found the perfect model yet, but there are two possibilities. One model is to perfect high click through rates, but nobody has figured that out yet.
The second is that the advertising models change. What we know works really well on social networks is brand advertising. If you’re putting out a movie, you should buy the social networks on the week before the release. If you’re selling Coca-Cola or Nokia phones, things that really don’t require a click through rate but require awareness, social networks are fabulous because that’s where people are spending their time. Separately, what I think you’re going to see more and more is a trend towards transactional revenue on social networks, such as putting in a payment system where people can buy things from virtual goods to status items.
So when advertising revenues will really catch up with the scale of these things is unclear, but it’s going to happen. I think right now everyone is drawing the same conclusion which is: “It’s time to really grow and own a big piece of the world. Then we’ll get the monetization over time, once we’ve achieved the dominance.”