Malaysian businessman, Vincent Tan, is purchasing the West Coast created social-networking site.  It’s global popularity (particularly in the US) has decreased over the last few years, but it is still very popular in Asia. Facebook and MySpace have overtaken the original social networking site by creating a better development platform (Facebook), or a better marketing and PR campaign (MySpace).

The terms of the deal weren’t disclosed, but most expect it was in the neighborhood of $100 million dollars . This is probably perceived as a pretty good deal considering its unexpected, but healthy growth in Asia. There are 75m users of the site across countries such as Malaysia and the Philippines, which is most likely what made it attractive to Tan’s MOL Global company that has made the purchase.

Friendster has been all but dead in the US for some time now. I’m sure when this tidbit came up in the news that most were surprised it was still operating, and even more surprised that someone was going to buy it. My guess is that most of the firms like KPC&B, Benchmark Capital, DAG Ventures and IDG Ventures were more than happy to get it off the books and move on to newer, more innovative ventures.

This is a very insightful look into the world of internet technology and venture capital and how it is growing on a global scale.  It exemplifies several unique trends:

  1. Just because you are the first to market in a niche does not guarantee any long-term success in that industry. As evidenced by Facebook being later to market, but now the most valuable.
  2. Just because a venture is not widely successful, does not mean that all is lost. Finding the right market niche can take time and possibly a few failures along the way.
  3. Exits for companies and their investors can come in some interesting ways. Sometimes when you least expect it.

UPDATE: December 18, 2009 – Looks like the deal didn’t turn out even close to as good as it was originally reported and it was even worse after this was taken into consideration