Friendster: Poised for a Comeback
With $10 million in new funds and a second patent, the social networking pioneer has big plans for an improved site to rival MySpace — Comebacks can be hard to stage—though not impossible. Just ask George Foreman, Bill Clinton, or the folks at Volkswagen who resurrected the Rabbit.
Context & Ripple Effects
Friendster's year began with an exit, not a product: coverage in January 2006 tracked a continuing sales saga in which the one-time social networking pioneer was shopping itself rather than shipping. Eight months later the script flips — instead of being bought, Friendster has confirmed $10 million in new funding, a second social networking patent, and a plan to rebuild the site expressly to rival MySpace.
The framing matters: Business Week casts this as a resurrection story alongside Volkswagen's Rabbit revival, which is really a bet that legacy assets — brand recognition plus a patent portfolio few early social networks accumulated — can fund a second act against a rival that long since captured the audience.
First-order effects
- The $10 million goes directly into a site overhaul aimed at MySpace, so Friendster's immediate task shifts from finding a buyer to defending a relaunch against the category leader.
- A second patent gives Friendster a stronger intellectual-property position at exactly the moment its traffic position is weakest, making licensing or litigation leverage part of the comeback math.
Second-order effects
- MySpace now faces a funded incumbent-turned-challenger whose most credible weapons are legal and brand assets rather than features, forcing it to treat patents as a competitive variable, not a footnote.
- Investors are signaling that late-stage social networks are worth backing on turnaround terms — a repricing that pressures every fading pioneer in the category to choose between raising, selling, or litigating.
Third-order effects
- If the pattern holds, value in first-generation social networking migrates from audience share to accumulated IP and brand equity, with patents functioning as tradeable assets independent of whether the sites themselves recover.
- The episode tests whether 'comeback' economics work in consumer internet at all — a category where network effects have so far punished pioneers — and the answer shapes how future social platforms get valued once their growth stalls.
The trend: First-generation social networks are entering a consolidation phase in which patents and brand equity, not user counts, become the assets that determine who gets acquired, funded, or licensed.