Live Issue... Friendster feels heat as Facebook builds Asian base

So popular is the network in the region that the US-based company recently adopted a new strategy designed to put greater resources in the area.

But the signs are that, even here, the network is coming under pressure from Facebook. Alexa (admittedly a patchy source for data) puts Facebook ahead of Friendster in terms of current usage in Malaysia, Indonesia and Singapore. Hitwise figures for Singapore show Facebook to be far more popular. ComScore data, meanwhile, suggests Facebook usage has tripled in the last year in Malaysia. Only in the Philippines is Friendster still a clear leader.

In some ways the end of Friendster’s dominance is natural, as it caters to the 15 to 24 age group while Facebook is designed to suit all ages. Facebook’s strong mobile offering is another factor behind its rapid growth. But according to Ian Stewart, Friendster’s head of Asia, the two social networks can actually complement each other.

“Facebook has increased its following globally from 400 million to 600 million in just a few months because it’s all things to people across the globe,” he says, adding that users often have accounts on multiple networks.

So what does this mean for advertisers? Nick Fawbert, managing partner of Third Space Consulting, argues that Facebook and Friendster have different advertising models in the region. He points out that “just because you have successful numbers doesn’t mean you have successful ad revenue”.

Friendster has greater presence on the ground. It has established itself in Southeast Asia through sales companies such as Admax and with an internal sales team. Facebook relies on Pixel Media and iHub and has a global sales alliance with Microsoft. It does not have local-market sales teams. Fawbert adds that Friendster has shown itself to be more flexible when it comes to advertising. For example, it is more open to brands building their own pages within its network. “Facebook has an older model, almost as if it’s like a newspaper with text ads and classifieds,” he notes.

“You can’t compare the number of users of social networks in the same way you would the number of readers of newspapers,” agrees Jeffrey Seah, Southeast Asia CEO for Starcom. “The user base growth of social networks and the advertising revenue mean two very different things; they go in two different directions.”

He argues that the challenge for Facebook and Friendster is that they are still very interest-specific. But so far, Facebook is proving more likely to evolve. “They have to choose whether they are going to act just as social networks, or whether they become someone’s personal diary, their alter ego. This is something Facebook in particular has achieved, hence its growing popularity.”

As Stewart says, 85 per cent of Southeast Asia is not on a social network and channels such as mobile are only just opening up. But it’s now clear that, with Facebook growing rapidly, Friendster will have its work cut out to ensure it can keep the ad dollars flowing.

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