I love living in the Bay Area, but there are some times when it amazes me how provincial some of the amazingly smart tech folks are here, mainly when it comes to discussing Los Angeles (loathed) or Twitter (loved). However, this strange behaviour recently occurred when I told friends that Meez had negotiated a deal to be featured as a games and avatar partner for large social network Friendster – this was followed by blank stares and eventual questions as to why we bothered to do so. Well, this is the answer.
Friendster is a top 15 web site in the world (that’s the whole world, not just Northern California). It gets over 30M unique visitors a month and more than 10M daily visits – those are extraordinary numbers. Its users are clustered primarily in a contiguous region (Southest Asia) whose GDP and populations are increasing quickly and which is relatively US-recession proof. Oh yeah, the site is growing rapidly.
Once you hear those facts, you have to make a couple leaps of faith. First you must forget that Friendster was once the hottest and arguably first social media network in the US since that is no longer relevant, but most Silicon Valley people can’t seem to forget that missed opportunity – now they have a different team, different investors and mostly different site. For a somewhat harsh view of the company’s earlier trajectory, see this INC Magazine article. And then you must agree that there are countries outside the regions of Northern California, Western Europe, China and India that matter, and in fact, matter a lot – that’s as hard for my peers to believe as it is that there might be great companies in the US Midwest.
Southeast Asia has over 500M people, and has multiple economies growing at 7+% per year. As a comparison, SE Asia had 1/3 of Europe’s population 100 years ago, and is now larger than it – and Friendster is the dominant social media network in many of those countries, and that they form a mostly contiguous region, unlike being the top network in Turkey, Ecuador and Bulgaria, for example.
Is the short term SE Asian revenue potential much lower than the US or UK, especially when it comes to advertising? Of course. Could other players like Facebook and MySpace start to take share in the region? Yes, but it’s not a core focus for them, and Friendster is evolving rapidly, with local language support and an open developer platform just being two of the most recent feature releases. Is it logical to assume that some of the growth we see in China and Korea in gaming, SMS revenue, and virtual items would come to at least some of the countries in SE Asia? Of course, which is why we chose it as our first expansion area.
Does that mean some people will never forgive Friendster for not being Facebook or MySpace? Yes, but once you point out the geographic opportunity and the dominant position the company currently enjoys, then it’s no surprise that we believe Friendster is are our key partner for Meez in SE Asia. I’m not the only one starting to see the value – see this recent TechCrunch post.