OPW INTERVIEW -- July 18, 2005 -- Taek Kwon joined Friendster last month as President and CEO. He was formerly the EVP Product Management at Citysearch and VP Engineering and Operations at Hotwire. Mark Brooks, Editor of Online Personals Watch, interviewed Taek to get his take on the future of Friendster.
Friendster invented online social networking, as we know it. How did they lose ground to Myspace, and how do you intend to regain it?
Social networking is very different from when it was invented. I wouldn’t say Friendster invented social networking; Friendster popularized social networking. When we first launched, we were the only game in town. Friendster was, and is, a great way for people to connect with new friends and reengage with old friends. Friendster didn’t have a strong secondary call to action for its users beyond finding and connecting with people. Many people used it as a dating tool. Now, many of the initial uses of Friendster have become commoditized. Myspace, Hi5 and the Facebook are all growing. The idea of ‘connecting’ is no longer a differentiator. It never really was. We have the ‘platform’ for adding value to users. But we haven't determined the applications that will sit on top of this platform to make it valuable, sticky, and we no longer have the cachet we did earlier. Myspace is focused heavily on music. They have a different approach to networking; I think of a lot of their interactions more as incidental social collisions than what we have on our platform. They provided users the ability to express themselves with a high degree of customizability and their ability to upload and integrate media is unparalleled. It’s a freeform experience and a vehicle for self-expression. It’s proven successful. Friendster needs to also add context to the site’s friendships. We don't really have a theme or context to drive activity. That’s the challenge, which we hope to meet soon.
What are incidental social collisions?
People are usually invited into Friendster. They join through invitations. A lot of people join to meet new people and socialize. The types of activity and the conversations people have on Friendster are usually based on people you knew before they joined; our networks are generally a little more closed, whereas Myspace is more open. On Friendster, a higher percentage knows their ‘friends’ offline than on Myspace. There’s value in both approaches. Myspace has proven their approach is wildly popular and they have figure out a way to monetize this. Friendster is focused more on maintaining the networks’ integrity and I feel we will also figure out a compelling approach to monetization.
What is Friendster's target clientele?
Our demographic skews young. I’d say the average age of our most frequent users is between 21 to 29 predominantly. But we have younger and a lot older too. Looking out further ahead our clientele is really anyone who has friends.
You commented in a prior interview your intention to combine business networking and social networking on Friendster. Could you expand on that comment?
I believe people, especially young people, are looking for four things. One, finding a date/mate. Two, finding a job. Three, finding a home to live in or a house to buy. And four, social interaction. i.e. they want to know what people are doing. Those four things are what life revolves around for those in their 20's to 30's. I could imagine a world where Friendster acts as a catalyst but doesn't focus on any one.
Are you interested in events?
We have a very qualified network. The majority of relationships on Friendster are real live offline friendships. We are exploring opportunities to facilitate offline interactions.
How will Friendster be making money in one year from now?
We currently make money, a fair amount, from traditional sponsored CPM advertising. We have a relationship with Google for contextual, text link advertising. There are other sources that we will experiment with. Two that may have a role are premium services and lead generation. We have a relationship with sixapart for blogs where we share revenue on upgrades. Users can sign up for a blog and pay for more storage and more UI flexibility. We might introduce more premium services like that. As you think about possibilities, you’ll not that a fair amount of commerce occurs from social interaction in our daily lives. Friendster could become a clearinghouse for some of this commerce online through its platform. One example might be birthday’s alerts. We could implement a birthday alert and offer users a coupon on hot birthday presents. I tend to think those types of leads will be more qualified than even sponsored link clicks.
What lessons learned from your time at Citysearch do you intend to apply at Friendster?
Citysearch was a struggling business. It was not making money when I joined and had a lot of problems. Some of their brand equity had been damaged. They were in a fairly new category. Others had an interest in local search. Yahoo and Google were entering the market. Friendster is in some ways a similar situation. Yahoo 360, MSN, Google and Orkut and even international companies such as Nate.com in Korea have identified social networking as an interesting category they want a piece of and have invested. The explosion in interest parallels what was happening in local search. For me, one key lesson learned is how to think strategically in that sort of environment of rapid change, a heated competitive landscape, and investment and M&A activity. When I left Citysearch they were profitable and growing profits at the fastest rate in our 9-year history. Unlike local search when it first started, the social networking category already has two of its leading properties in the black and it’s such a new category. Thefacebook has said it was cash flow positive since Q1. Also Myspace has said they are profitable. It’s a very new category. So, to have two of the top properties in the black is very exciting.
Who do you regard as the most noteworthy online dating competitors right now? Are online dating companies really direct competitors?
I don't consider Friendster a dating site although online dating is one utility provided for many users. Friendster is a platform that hasn’t committed to any vertical yet, and perhaps never will. The fact is, users use it for dating but there’s a lot more we can and will do in the future. We don't consider any of the online dating companies direct competitors. I find eharmony fascinating. They have a model for building an emotional tie with users during their interview/signup process, taking them through a highly committed screening process and then pushing qualified content to them. That strategy is something that is not only applicable to dating. In many ways users are open to pushed content as long as it’s from trusted sources. Friends are trusted sources. I could see similar functionality on Friendster. The idea of pushing content to the user in a qualified way is very interesting.
What are your thoughts on a mobile Friendster service?
We recently met with some of the folks from Nate.com and Cyworld.com. Cyworld is a social networking site for Nate, a Korean portal. SK Telecom owns them. Mobile internet is fascinating to me. They offer a tight integration between their IM client, social network, blogging, and profile page submission. They’ve enabled content access, submission, and editing on any device. The billing process revolves around the monthly phone bill. It’s an interesting phenomenon, which we’re not going to be able to duplicate here because the telecom industry is more fragmented here, but the idea of monetizing social networks through micropayments on a phone bill is interesting. The Koreans have more adoption of mobile internet usage. There are some interesting lessons to be learned.
What might Friendster look like in 3 years from now?
We will have more tools built on top of the Friendster platform. Blogging has had great adoption. I can imagine a heavy media component to Friendster. I can also imagine there might be tools and applications that help in organizing friendships offline. In any event we definitely will move in the direction of adding value beyond being the personal face-book we are today.
Mark Brooks: Taek is just the medicine for Friendster. MySpace has stolen some of Friendster's thunder but I think Friendster will find it's way under Taek Kwon (and Jonathan Abrams).