Friendster gets $10 million for revitalization

Friendster Inc., a pioneer of social networking Web sites, said on Monday it received $10 million in new funding to expand abroad and help its pioneering social-networking site revitalize in a market now reined by younger successors who stole its thunder.

Founded by Jonathan Abrams in 2003, Friendster was one of the first social networking start-ups with investors like Kleiner Perkins and Internet heavyweights such as former Yahoo! CEO Tim Koogle, former PayPal CEO Peter Thiel, and former Amazon.com VP Ram Shriram.

But, soon the company lost its early lead as MySpace.com and Facebook.com grew to become the top Internet meeting places for teens and college students in the past year.

Kent Lindstrom, President of Friendster and a three-year veteran who took over day-to-day management in February, said his strategy was to avert the company to its original vision of building on real-world relationships between friends instead virtual friendships that other social networks emphasize.

"We are hopefully your place to link to your real post-college friends," he said in an interview. "In some sense we have conceded that MySpace is a much better media company."

The company stated that it now has an aggregate of $13 million in what it calls a “fresh capital expansion” from investors. DAG Ventures of Palo Alto is a fresh investor leading the round and Kleiner Perkins Caufield & Byers and Benchmark Capital, both of Menlo Park, are in a process of investing again in the company. The company confirmed it received $3 million in February. “It's like starting over,” said Lindstrom.

MySpace.com and Facebook.com are ranked as the two most popular social networking Web sites in the United States. Of them, MySpace is a teenage Web craze with 51% or 54.5 million visitors, up by 157 percent from a year earlier, of the U.S. social networking market, which is much more advanced than No. 2-ranked Facebook, a fad with college audiences, with 4.7% or 14.4 million visitors, up by 117 percent, of fresh visits, as per estimated by the Internet audience measurement firm Hitwise Inc.

On the other hand, Friendster attracts 0.24 percent, or 213 times fewer U.S. visitors than MySpace, ranking it 34th among U.S. Web users of social networks and online communities. Friendster had 1.5 million visitors in July, up 18% from 1.2 million a year ago.

With the funding, the company said it will keep its emphasize on its niche, the post-college crowd in their 20s and 30s, looking for updates on their friends, their careers and their whereabouts.

About the improvement of the site, Lindstrom said that the company is joining hands with video sharing Web sites such as YouTube and Grouper, so its visitors can share videos and images they create with their friends instead of trying to compete with them.