OPW INTERVIEW -- July 18 -- Taek Kwon joined Friendsterlast 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).