A Dud in Cupid's Online Quiver?


By Alex Salkever Friendster may be the hottest dot.com to show up since Google. Silicon Valley entrepreneur John Abrams started Friendster.com as a way of making it easier to meet friends of friends and avoid the "creepy" feeling he associated with online dating -- and his concept quickly caught fire. Abrams hasn't spent a penny on marketing, yet Friendster has attracted 1.8 million members since its launch last March -- 1.7 million more than Barry Diller's Match.com (IACI) attracted in its first year. It has even spawned a clone from online dating service eMode -- a new site called the "Tickle Network."

The way Friendster works is simple. To join the online community, someone either has to be invited by an existing Friendster member or form a new Friendster group and ask people to join. Friendster members have to post profiles full of personal information plus their rationale for using the network. And to keep things genteel, members have to ask for an introduction before they can talk to a friend of a friend inside Friendster (see BW Online, 6/10/03, "Finding Love Online, Version 2.0").

PREBUBBLE LATHER. The service remains free so far, but Abrams has repeatedly hinted at a paid model in the near future. That could involve charging Friendster members to message each other or requiring a monthly fee to use the site. Perhaps to make a paid membership more valuable, Abrams has expanded Friendster's circle to social networkers, people seeking activity partners, and even folks trying to build business networks. So far, though, Friendster looks likely to live or die as a dating service.

The "viral" adoption of Friendster has impressed the dot-com elite, who are whipping themselves into what can only be described as a prebubble lather. Former Yahoo! (YHOO) CEO Tim Koogle, former PayPal CEO Peter Thiel, and Google board member Ram Shriram have together sunk more than $1 million into the company, Abrams told CNN in October.

Rumors have been floating around the Valley that Friendster has bagged $10 million in seed funding from powerhouse venture capital firms Benchmark Capital and Kleiner Perkins Caulfield Byers. Neither of those outfits could be reached for comment, but Friendster is listed among Benchmark's portfolio companies, with managing partner Bob Kagle sitting on the board alongside Koogle and Abrams, who declined to comment for this article.

Could so many smart, rich, powerful people be wrong? In this case, perhaps.

LINKS IN THE CHAIN. Undeniably, the online dating market is one of the closest things there is to a pot of gold. According to the Online Publishers Assn., U.S. consumers forked out $214.3 million for online dating in the first half of 2003, up 76% from the same period the year before.

That's all well and good, but the Friendster froth could be a classic case of Valley disconnect with the vox populi. Essentially, it's an attempt to apply the economic theory behind eBay (EBAY) -- bringing buyers and sellers together to create commerce -- to a far more complex social phenomenon. And in that context, the Friendster model for dating, while fun, has a number of flaws that don't plague the personal-ad approach favored by most successful dating sites.

For one thing, Friendster assumes that friends are a good screening mechanism for quality dating partners: You like your friend, so you will like your friends' friends. This isn't a new concept. Most singles have gone on a date set up by mutual friends. Trouble is, friends may not be very good matchmakers, according to Mark Thompson, a psychologist who has studied dating and human interaction for decades and is now CEO of Weattract.com, a dating search engine that -- full disclosure -- works with Friendster rival Match.com.

DUBIOUS PROPOSITION. Thompson says despite some research on the subject, no empirical evidence shows that dating friends of friends results in more successful coupling. In fact, friends may be counterproductive, because they think they know you better than they actually do. "Friends don't know systematically what matters," says Thompson. "Friends don't bring a lot expertise in dating other than good intentions -- and you know the old saying about where those lead."

Friendster also assumes that relationships between friends are roughly equal, which is rarely the case. This can make for uncomfortable situations, such as when Friendster members invite someone into their network who doesn't really want to be there. In the offline world, people can make an excuse not to come to a party. In the asynchronous online world, there's no viable excuse aside from the truth.

Telling the truth -- no, I don't want to be your friend -- is uncomfortable, so most people acquiesce. But the worth of networks built on such dubious or unwanted connections likely isn't terribly high. "I'll get friend requests from people I haven't spoken to in over a year," says Wade Tinney, a sometime Friendster user and co-founder of video-game company Large Animal.

"It's hard to say no, so you don't, and maybe you catch up a little. But eventually you realize there's a reason I haven't spoken to that person, and that's because I didn't need them in my life," says Tinney. Much less, pay to share time with them.

NOT-SO-FRIENDLY COMPETITION. Friendster's approach also overlooks the social costs involved in making an introduction. If a date goes horribly wrong, then the friend in the middle may feel the wrath of the other two. Moreover, dating is often a bloodsport driven by egos and sexual appetites. Lots of alpha-daters might be loath to connect their friends, much less friends of friends, with partners they may view as prospective mates for themselves.

"Your friends are prepared to help you because they are your friends," says Duncan Watts, a Columbia University sociology professor and the author of Six Degrees: The Science of the Connected Age (Norton, 2003). "But we are also competitive with our friends, and sometimes we aren't prepared to help them."

None of this is to say Friendster isn't a fascinating experiment -- one that legions of people find fun. The site continues to grow quickly. And maybe, in the not-too-distant future, some people will pay to participate.

My guess, however, is that the audience quirks that separate a Friendster from an eBay will make Abrams' baby a tough sell. That still leaves selling advertising on the site as a way for Koogle, Thiel, Shriram, and the venture capitalists to recoup their investments. That could earn them a modest return. But I wouldn't bet on Friendster becoming the category killer that Silicon Valley's elite seem to think it'll be. Salkever is Technology editor for BusinessWeek Online and covers Internet issues weekly in his Nothing But Net column


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