Friendster receives investment

Filed in archive Venture Capital on September 4, 2003

Friendster has announced a round with Business angels receiving USD 1 mio. Friendster does some a lot of publicity (and hype) actually and has started the business with very low investments. So this round should help to stabilize the service.

I also learned a new word:

"One benefit of this model is the 'eBayity' of them. It's low overhead. The category is also rife with opportunities for Web services to create a kind of personal portal. And they haven't really tied into the whole blogging craze yet. It's a good match." said Ross Rubin, an analyst with eMarketer.

Friendster does have some similarities with Ebay. First it does need the network effect. The service does only provide a useful service if enough people hook up the site. However on ebay you could make a deal, just with one different partner in the market. But what do you do with a scattered group of friends in Friendster?

Besides the constraints about market penetration remains the question, what will be the business model of Friendster. Surviving as an ad-based portal, selling PIs? Not too impressive....