Posts Tagged ‘friendster’

Friendster owner MOL Global and Facebook to bring Facebook Credits to Retail Stores

Thursday, July 8th, 2010

It seemed like just yesterday, or seven months ago, that the (arguably) one that started them all, Friendster, was up on the ‘for sale’ block. After the transaction went through, South East Asian firm MOL Global walked away with the owners’ title. Not only did they acquire a 115 million user base, but perhaps more importantly, they also walked away with some rather valuable U.S. Patents, including the “compatibility scoring of users in a social network,” “how people are connected on a social network,” “the process of friends encouraging each other to upload content,” and “ways for users to manage social network relationships.”

molIn addition to these patents and owning Friendster, MOL is also a payment provider working close to home in South East Asia. The firm received a major shot in the arm yesterday when it was announced that they’d struck a deal with Facebook to aims to make it significantly easier for millions of users across Asia to purchase virtual goods in online games and applications on Facebook.

The deal looks like so: MOL Access Portal, a wholly owned subsidiary of MOL Global will act as payment provider for Facebook credits. This in turn will allow users to buy Facebook Credits using MOLPoints (the company’s proprietary form of currency). Spread across Malaysia, Singapore, Indonesia, The Philippines, Thailand, India, Australia, and New Zealand, MOL has some 500,000 outlets that will make MOLPoints available to interested consumers. Additionally, outlets including 7-Eleven stores and cybercafés will have a stock of Facebook Credits available for purchase. Malaysia and Singapore will see co-branded MOL and Facebook gift cards. The project is aimed at targeting a market where it’s more common to make virtual goods and services purchases with pre-paid cards, rather than credit cards.

“Working with MOL means we can offer the benefits of Facebook Credits to millions of people in Asia using a payment system that is already widely used and trusted,” said Vaughan Smith, director of business and corporate development at Facebook. “We’re investing in the long-term future of Facebook Credits and we view this agreement as a major opportunity to broaden the availability of a simple, unified currency that can be used in games and applications across Facebook.”

Currently, Facebook has over 150 applications, many from leading developers, that each requires individual payment details for each game’s purchase. Facebook Credits seek to unify this customer experience, providing a virtual wallet of currency that is universally accepted across the entire platform.

As we’ve already come to know, Asia is the home and birthplace of the microtransaction. If Facebook is planting a big flag in that market, how long will it be before we see universal, global adoption? I predict this coming holiday season might see another geographic rollout, and by this time next year, Facebook credits will be THE standard on the platform.

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Bebo to Begone by May’s end

Friday, April 9th, 2010

One look at AOL’s share prices over the pat few days indicate that investors are willing (looking forward to?) to letting the social network Bebo go the way of the Dodo. Announced on Tuesday of this week, the following day, AOL’s shares surged to a price they haven’t seen since it’s November spinoff, rising almost 4 percent to close at $27.44

fail-boatThere’s a couple of things going on here that have lead to Bebo’s epic fail. First and foremost, AOL executives obviously have their collective heads up their ass, as they clearly weren’t able to learn a thing from News Corp’s purchase of MySpace.com. AOL shelled out a massive $850 million to Joanna Shields of Bebo in 2008, hoping to corner the marketing on UK teen girls.

All of these girls are now, of course, are on Facebook.

The official memo that was distributed to employees states that, “Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space.”

Read: Bebo is a money pit, and we’re not going to sink another dime into it.

While AOL states that they are looking for a buyer for the ailing social network, they’ve also publically stated that a shutdown might allow them to write down some of the acquisitions costs, thereby yielding hundred of millions of dollars in tax savings. 3 guesses, the first 2 don’t count; which option to you think AOL is going to go with here? AOL has also stated that they’ve set a final hour of the end of May to either find a buyer, or they’ll pull the plug. Friendster anyone?

While based in San Francisco, Bebo never really gained traction in the US, but had, at one point, a strong user base in the UK. They got into the virtual goods market last year as part of a promotion for their Bebo Mobile service. And like many other social networking services, Bebo is a host for social gaming apps including titles from Zynga.

The sale of Bebo isn’t the only “Hmmm…maybe that wasn’t the smartest use of capital we’ve ever made,” issue going on at AOL. They’re also working on selling off the ICQ IM business, most likely to a foreign investor. This sale has been moving at a the pace of molasses, but once if completed, could net the company between $100 – $150 million in cash.

This pile of plunder could give CEO Tim Armstrong a nice position to sit in at the Google and Microsoft table when negotiations commence over a new deal for AOL’s search business. The Google deal is set to expire in December.

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Facebook gains patent, plans to make microtransactions easier

Monday, March 1st, 2010

Facebook announced late last week that they’ve officially been granted a U.S. patent for their ‘news feed’ technology. This announcement follows just one week after the company announced that they’d partnered with PayPal as a payment provider within the massive social network system. The latter announcement officially puts to bed any rumors about Facebook developing any type of internal microtransactions payment platform that has been a source of speculation for quite some time.

The News Feed patent now shores up Facebook’s main content delivery mechanism to be free from copycats. In the official filing, Facebook’s patent includes, “a method for displaying a news feed in a social network environment.” The documentation goes on to also cite, “new items regarding activities associated with a user of a social network environment and attaching an informational link associated with at least one of the activities, to at least one of the news items, as well as limiting access to the news items to a predetermined set of viewers and assigning an order to the news items.” If any of this sounds remotely familiar, think Twitter, i.e. network activity and attaching informational links, etc. However, when viewed under the microscope, the patent does not use specific wording such as ‘timeline’ (i.e. twitter’s nomenclature). Facebook reps comment only that they are “please with being awarded the patent,” but failed to comment on how the patent may effect how other social networks use a similar method to display user information.

This patent also brings up other related social networking patents. You’ll remember that former U.S. based social network Friendster (now owned by Malaysia’s MOL Global) owns 5 social networking based patents including: “compatibility scoring of users in a social network”, “how people are connected on a social network”, “the process of friends encouraging each other to upload content”, and “ways for users to manage social network friendships.” Obviously, there’s a high cross over in the social networking arena, and Friendster has yet to exercise these patents, but Facebook could very well take a different route, but probably won’t. It’s a score for Facebook to win the patent, but actually enforcing it could prove to be a PR disaster for the company.

On the microtransactions front, Facebook reports that there are now over half a million applications available to it’s users (in comparison, back in November, wired reported that Apple’s iPhone had over 100,000 downloadable apps available). Facebook put it’s ‘credits’ system in to play back in May, but hasn’t really pushed the product. However, with this many apps available, the monetization potential is clearly too big to ignore. Facebook comments that its, “early testing has show that users pay with Facebook Credits are significantly more likely to complete a purchase than the average Facebook user,” in reference to those that pay with an RMT. This data has clearly prompted Facebook to start looking at it’s ‘Credits’ system a bit more seriously, presumably one of the reasons behind the PayPal announcement.

To this end, along with their patent announcement, Facebook has officially announced that it will now make integrating its credits system much easier for application developers. Backing this up, the company also says that they will invest in research to “improve the program and increase conversion and net revenue for developers.”

As with most online application revenue generators (think Apple iTunes store), Facebook wants a cut of the revenue, as they provide the exposure and platform for said applications. Facebook plans on taking a 30 percent cut on all sales, the remaining 70 percent going to apps developers.

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Former EA exec calls company’s strategy “All wrong”. EA fires back.

Monday, January 18th, 2010

Late last week, former senior EA executive Mitch Lasky, who sold his Jamdat Mobile service to the company in 2005 for $680 million called EA’s current business model “wrong”. Lasky thinks that the EA’s move away from boxed titles to monetization via virtual goods and currency isn’t the wisest move for the games giant.

mitch-laskyOn his blog, titled Bizpunk, Lasky writes, “EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital. Think again.”

Lasky’s comments aren’t just coming out of thin air. His article is a response to EA’s CFO Eric Brown announcement that 2010 will see revenues and earnings down (again for EA) from previous years (and quarters). This news comes just on the heels of EA laying off 1500 employees, a move that company CEO John Riccitiello expects to save costs. Riccitiello also points to the layoff as a way for EA to, “cut cost in targeted areas and invest[ing] more in our biggest games and digitial businesses.”

It’s fair to say that any large corporation has it’s fans and detractors. Those that are not happy with the way things are being run have every right to express their opinion, but it’s not to often that a major corporation will address such complaints, at least not publically. It seems as though Mr. Lasky’s opinion is one that EA will publically address. Lasky published his article at 8:41 PM (presumably PST) on Monday, January 11th. It took EA three days to decide to address the issue or not, and on Friday, they made a public statement.

Before we get to this statement, it’s important to consider where things are coming from. While Lasky was at EA, he had a very valid shot at becoming the next CEO after then man-in-charge Larry Probst stepped down. Instead of Lasky, Riccitiello got the job.

EA’s response to Lasky: “Mitch needs to try de-caf. It’s never easy being turned down for a job, but most people don’t spend three years obsessing about it. Since Mitch left EA, Apple invested the iPhone, Facebook evolved to include a gaming platform and EAMobile became a world leader.” Lasky, incidentally, points out in his article that it’s exactly thee years to date since Riccitiello assumed the reigns at EA.

Lasky continues his titrate on EA by pointing out that over the course of Riccitiello’s three year reign, the company has lost over $11 billion in market value, and now has a valuation below $4 billion. He argues that this value, combined with a myriad of what he sees as internal problems at EA makes them a target for potential acquisition. Specifically Lasky sites Disney as a potential buyer, as well as Chinese online service Tencent having the ability to “swallow EA whole.”

Mitch Lasky is a partner at Benchmark Capital. Investors include online properties such as Friendster, Gaia Interactive, and Riot Games. If only by association, Lasky isn’t opposed to the model, just the way EA is going about it.

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Friendster to be bought by month’s end

Friday, December 4th, 2009

A recent report by TechCrunch indicates that first on the scene social network Friendster will most probably be sold by month’s end. While the deal is yet concrete, inside sources have indicated that the company will be sold to an unnamed Asian buyer for at least $100 million.

new_friendsterTo say that Friendster’s had a long and winding road might be the understatement of the decade. Founded in 2002, the original social network ruled the internets for a short while, but was quickly taken over by MySpace and Facebook. At least in the U.S. market – as Friendster ended up finding a home in the most unlikely of places, Asia. Currently, while numbers are paltry in the U.S., Friendster enjoys 50 + million users in the Asian market (over half the networks total number of users).

TechCrunch put a valuation of $210 million on Friendster back in July, which doesn’t account for Friendsters refocusing of their monetization strategy which they launched at the end of this past October. Instead of relying on advertising revenues, the social network made the shift to revenues coming from microtransaction purchases. A move that’s apparently been working well for hi5, with an admission that hi5 is now more gaming focused than social networking focused. However, that’s not to say that Friendster doesn’t have the same potential. Especially when you look at where their highest market concentration is, who’s buying them, and what market they’re operating in: Asia.

In hindsight, it looks like this deal has been in the works for quite a long time. Last year, Friendster brought now CEO Richard Kimber on board. Prior to Friendster, Kimber headed up Sales and Operations in the South East Asia region for Google. This past summer, Friendster opened itself up on the ‘for sale’ block, and as stated above, this past October they initiated a major shift in monetization from advertising to microtransaction reliance.

Again, no buyer has been named, but the inside source indicated that China’s Tencent Holdings was amongst the short listed buyers. Facebook also showed interest, but was turned away due to competition and IP issues. My guess is that Facebook could really care less about the actual mechanism of Friendster itself, but would love to get their hands on the 5 U.S. patents that Friendster currently holds with the U.S. Patents and Trademarks Office.

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Friendster to launch microtransaction based virtual goods sales

Thursday, October 29th, 2009

Friendster. Remember them? While they’re still busy gobbling up the patents, they’ve also managed to remain on the radar. At least in the Southeast Asian market. That’s not to say that Facebook isn’t closing in on their action (in so many more ways than one), with Friendster only edging out Facebook in terms of users in the Phillippines according to ComScore. In neighboring countries Indonesia, Malaysia and Singapore, Facebook has already taken the lead. The increasing interest and involvement in Facebook has naturally carved into Friendster’s last remaining turf. They’ve seen a decline in both visitors to the site, as well as how long these visitors remain on the site. “Friendster has to find new ways to make money but at the same time they have to maintain their market share and have a reason why people would stay with Friendster and not go to Facebook,” says Ben Poole regional head of interaction for media agency, MEC. “They also have to up their engagement levels.”

FriendsterIn order to maintain their foothold, as well as open new revenue streams, Friendster is upping their ante, instituting a virtual goods market, powered by microtransaction purchases. They’re also getting into physical, real-world events such as their recent Pinoy Friendster Day in the Phillippines that included live performances by local bands, speed dating, style make-overs, and fireworks that attracted over 7,000 participants.

Currently generating revenue via advertising and sponsorship deals, the new virtual goods sales will open up new revenue streams for the social network on the decline. Alla Facebook and MySpace, Friendster’s virtual goods system will include and API that will open up development to advertisers, game publishers, and application developers – all of which Friendster will take a cut of purchases made with their proprietary currency, Friendster Coins.

Based on the popularity of prepaid cards in Friendster’s area of influence, “We’re extending that model to work on Friendster,” says Friendster’s global product director Jeff Roberto. “We’re applying it to a variety of products and services that have realized success in other micro-payment ecosystems.”

“Once you establish a virtual economy, it’s just your creativity, or best practices that you can integrate, that limit the type of things you can sell,” points out Benjamin Joffe, CEO of Beijing-based digital specialist +8. “There’s so much you can sell, so many existing proven ideas and so many new ideas to find.”

So while Friendster is still chugging along after missing the boat so many years ago, the only question that can really be asked here is – is history, yet again, repeating itself? In the region where the microtransactions model was born, Friendster is only now getting around to instituting the model? We’ve seen the dramatic increase in revenues generated via social networking virtual goods sales, as well as casual gaming sales, primarily in the Facebook court. Once an industry innovator and leader, is this new virtual goods market just another ‘follow the leader’ for Friendster?

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PlayMesh introduces virtual goods monetization to the iPhone via iMafia

Monday, January 26th, 2009

Over the past year, we’ve seen a dramatic increase in social games, those that are played over social networks like facebook, myspace, Friendster, etc., but if San Francisco based PlayMesh have their way, 2009 could be the year of social games making the leap to mobile platforms. What’s more, PlayMesh’s iMafia has found an innovative solution to offering virtual goods on mobile platforms, traditionally a challenge for most iPhone applications.

If you’re on Facebook, there’s a pretty good chance that one of your friends has at one point or another tried to recruit you to join their ‘Mob’ via Mob Wars.  Building on the popularity of this game play format, PlayMesh co-founder Charles Ju says that the time is ripe to bring the concept from social networks to the iPhone.  iMafia, which was released on Friday, has been on a juggernaut course over the weekend and already ranks at number 55 (as of Monday morning, 26 January 09) on the Apple iPhone AppStore.

Capitalizing on the iPhone’s unique UI, iMafia players use screen gestures to navigate through the game world map.  Actions such as entering a building are accomplished via a simple tap function.  Similar to Mob Wars and other ‘domination’ type games, iMafia’s concept is simple, yet highly addictive: climb the ranks of a crime family, each ‘job’ requiring more and more skills/abilities.  Billed as (technically) an MMORPG, players can play against each other (and as it’s turn based, players do not need to be online at the same time), and may purchase virtual goods along the way to help them with quests.

So far, so good.  Not really much we’ve not already heard.  But here’s where things become interesting.  Ju says that iMafia is a mold breaker, as it successfully relies on virtual goods sales to monetize a social network in a free-to-play game context.

But hold on a second…Apple doesn’t allow developers to present free-to-play’s that rely solely on virtual goods sales to monetize, right?  I mean, call me crazy, but if this is the case, wouldn’t developers be giving away their apps as free-to-plays and seeking alternative payment options for monetizing their virtual goods?  Remember, the BigMac keeps a healthy 30 percent of all revenue generated from paid game sales, while others’ fees can be dramatically lower.  What gives?

What gives is that PlayMesh has put itself in a win-win situation, by circumventing Apple’s rules in so much as purchases of the companies’ other titles, Chess Puzzles, iType and Speed Shapes for example, count as ‘payments’ for virtual goods within iMafia.  Purchasing ‘Chess Puzzles ‘for example would grant the player premium points that can be used to increase your health, purchase bigger and better guns, or recruit more mafia members to your clan within the game.  However, what’s interesting to note is that the free versions of these applications have been removed, and are being replaced by paid versions, pending Apple’s approval.  This should be an interesting one to watch development, as it seems as though there’s more than just an App approval process going on here.  If Apple approves these paid applications, and PlayMesh uses them to fund virtual goods within another of it’s applications, the precedent is set, and I wouldn’t be surprised to see a deluge of other developers falling in line ASAP.

http://www.vimeo.com/2913153

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RockYou – on track to be on top

Wednesday, November 12th, 2008

Virtual Reality Social Games Worlds Networks can at times be busier than Grand Central at 5:09 on the Wednesday before Thanksgiving.  There are lots of players, each with their own unique take and slice on their specific niche.  And while playfish has certainly made a lot of noise over the past few weeks, it’s often the guys in the back of the room that you’ve got to look out for.  RockYou, please step forward.

RockYou is a self described, “innovator, creator, and distributor of widgets and applications on the social web.”  Try saying that one 5 times fast.  In other words, RockYou creates a lot of those cool widgets and apps that are served up daily every time you log in to your facebook account.  RockYou is the creator of popular apps including SuperWall, SuperPets, Likeness, and HugMe while their widget stable includes Slideshows and Corkboard.  Sound familiar, chances are you’ve used one or RockYou’s apps recently?   They also made waves back in July with the purchase of popular apps Speed Racing and Pieces of Flair.  According to insidefacebook.com, at the time of acquisition #11 app Pieces of Flair was clocking 475,000 daily users, and # 27 Speed Racing weighing in with 200,000 users per day.

Insidesocialgames.com’s Top MySpace games for September 24, 2008 places 2 of the top 12 belonging to RockYou, and they consistently rank high on the Facebook Most Active Users directory (Superwall, Hugme, Pieces of Flare, Likeness, and Birthday Cards all ranking in the top 28).

In addition, RockYou also specializes in creating customized branding and marketing solutions that reach consumers in a medium that the feel comfortable with and used to via applications.  They’ve developed applications for any social network including Hi5, MySpace, Bebo, Facebook, Bebo, and Friendster.  Reaching the masses via advertisement through entertainment is nothing new, but few companies are able to do it as well as RockYou.

There has been a bit of confusion regarding just what slice of the social networking pie RockYou is after, as CEO Lance Tokuda was quoted as saying “ We want to be like the Electronic Arts of social networks, and build games for social networks,” at the Startonomics conference in San Francisco in the beginning of October.  While at the same time Brett Errill reported over at his blog that RockYou is still focusing its efforts on their ad network.

Whether Tokuda’s statement was taken out of context or not, I say: Does it matter?  With monetization models popping up all over the place, along with Google’s own entry into the game monetization via advertising, the way I see it, RockYou is already leaps and bounds ahead of their competitors.  With highly popular widgets and applications perfectly positioned in front of users of some of the world’s highest trafficked websites, along with the already existing ad network specialty, RockYou is well on track to becoming a mighty force to be reckoned with.

Find out more about RockYou by visiting them at www.RockYou.com.

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