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Thursday, September 25, 2003
Rumour mill: Google may buy Friendster.
The happy side:
Friendster has a fairly risky business model - after the Beta, people will (hopefully) pay for some services. Now add Google to the equation and you begin to see that the uber-Google power could, like it did for Pyra Labs, subsidize these services in exchange for all of sorts of things with value to Google - contextually targeted ad space, integrated users, etc.
That is a nicely organic little business empire that Google is building - and one which has massively self-reinforcing resources and competences that have not even begun to be utilized in any significant way yet.
The dark side:
Google and Friendster are both (allegedly) funded by some of the same people. These people are starting to realize that Friendster will NEVER make money on it's own. How to recoup some of their investment? Simple, sell it to Google, and keep the money in the family.
Of course, this polarization is stupid. Friendster adds value to Google, can't make money on it's own, and is generally cool, so this is a good deal for all involved (if there's any truth to the rumour!!).
I am also consistently amazed that VC in Europe is so retarded that they will NEVER fund anything as cool as Friendster or Google. More on this later.
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