Before Facebook there was… Friendster? Yes, that’s right!


Once upon a time, Friendster was the hottest thing in social networking. However, its inability to keep up with demand from users and the rise of Facebook led to its ultimate demise.

2002 marked the era of social networking with websites like Friendster, Myspace, HI5, and Orkut, all competing to be the king of the social network. In what was once a graveyard of failed attempts at building social networks (even Google was brought to its knees), Friendster appeared to emerge as the winner, boasting over 3 million users in less than a year.

Many thought Friendster had won the race. However, with the founding of Facebook in 2004, Friendster’s claim to the throne became murky and its story took a dark turn.

Now let’s turn to how it all began….

Friendster was founded by Jonathan Abrams, a Canadian computer programmer, in March 2002. The site started in a basement with ten friends and went live that same month. It grew to several hundred users within a few weeks and grew to over 3 million users by early 2003.[i] Friendster became the world’s first social media platform that engaged the mainstream.

Friendster’s main purpose was for everyone from around the world to interact and socialize with their old friends and make new ones.[ii] In 2002 that was really cool, but I guess in today’s world it seems quite mundane.

Anyways, Friendster continued to gain momentum in 2003. Its user base was growing faster than it could handle. And, just like any other founder of a fast-growing early stage tech company, Abrams took Friendster to the Silicon beauty pageant. Little did Abrams know that this single decision would play a pivotal role in his fortune and that of his company.

Friendster generated strong interest from Google and several VC firms. Google had offered $30 million to buy out Friendster, while Kleiner, Perkins, Caulfield, and Byers offered $13 million as growth equity. Abrams accepted the VC firms’ offer. They assigned their own Board of Directors, and allowed Abrams to remain as CEO.[iii]

Unfortunately, a few months later, Abrams was ousted as CEO by the new Board of Directors and replaced by interim CEO Tim Koogle, who previously served as president and CEO at Yahoo.[iv]

Compounding issues, the VC firms were more interested in pursuing growth than fixing the many bugs that began to emerge as Friendster’s customer base grew. Friendster, true to its vision, began to expand internationally and gained strong momentum in Asia, especially in South East Asia.

However, the picture at home was not as rosy. Friendster peaked at about 10 million users and began to tumble downhill. Customers faced with incessant bugs and brick walls in logging into their page soon eloped with the newcomer, Facebook.

The rise of Facebook and the fall of Friendster…

Some people say that Friendster’s first mistake was who it chose as a long-term partner, which led to an obsessive pursuit of growth and resulted in its downfall. What do you think?

I think there is more to the story. I think Facebook offered customers a superior value proposition. Even Abrams mentioned that during the early days of Facebook, he saw the company as a deadly threat. Some say Abrams tried to copy Facebook’s business model, before (yes, that was its original name!) was, others say he came up with the ingenious ideas to include a college edition, a newsfeed, and a social graph, all of which made Facebook a success.[v] But these grand ideas remained just that, only for Facebook to build a foundation based on these ideas, becoming the new crowned king of social networking in less than two years.

In fact, Friendster met up with Mark Zuckerberg and his team in the hopes of buying Facebook. The problem? Abrams says they didn’t offer the kind of numbers Zuckerberg wanted.[vi] Instead, Friendster eventually sold its social media patents to Facebook in 2010 for $40 million.[vii] I guess the bright side is Friendster got some value for being a pioneer, albeit dismal in comparison to what it could have been. I can only imagine Abrams’ views on this.

Where is Friendster today…

Well, the simple answer is it doesn’t exist. But before its unspectacular disappearance, it was sold to a Malaysian company, MOL Global, for $26 million in 2019. Ouch! Facebook’s market cap today is about $600 billion.

What are the lessons learnt? …

While I agree with the age-old saying that hindsight is 20/20, I believe we can draw some generalizable lessons from Friendster’s story:

  1. Do not pursue growth at all cost, especially at the expense of your current customers
  2. Choose your life partner wisely
  3. You do not have to be first to win, but learn from your predecessors and do not repeat their mistakes
  4. A “copy-cat” can become a market leader!
  5. All hail, execution!











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Student comments on Before Facebook there was… Friendster? Yes, that’s right!

  1. Loved the blog very well written! We always talk about having a first-mover advantage but Friendster is a clear example of how sometimes being a first mover in the market comes with bigger risks and hence, bigger costs to pay. Your lessons learnt are on point and I would emphasize the importance of scalability for any startup. They should have focuses on the technology and satisfying customer needs before expanding geographically.

  2. Super interesting read–thanks for sharing! I think Facebook has been very successful with its copycat strategy over the years. A recent example is how they copied stories from Snapchat within Instagram and made Instagram stories more popular. It’s directly linked to your point about execution. Instagram stories was able to integrate similar features, had a better advertising platforms for brands, and better download and upload speeds in comparison to Snapchat (most prominently noticed when traveling abroad).

    Now I’m curious–what’s the next platform to unseat Facebook?

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