Friendster was bought two weeks ago by Malaysian company MOL Global for, according to TechCrunch, $26.4 million. This price shows that, because of Metcalfe’s law, in social networking only the largest companies can stay. This means that the market is already overcrowded and some players have to step out of it.
One of them is Friendster, but MySpace won’t have it so easy either. Staying close to such a niche as music is not a warranty. If you are not leading the market, as Twitter and Facebook are, your traffic will start dropping and you will finally be beaten up.
This also means that staying close to a local market does not mean anything at all, as the social networking business is a world one. Friendster is still the leading network in South East Asia, but this is worth only $26.4 million. One more thing: if I were Facebook, I would sell today. Friendster had many chances to do so when it was the first network. Unfortunately for its founders, it didn’t.