Interview with Jonathan Abram: The man who rejected a $30m sale of Freindster to Google

Interview with Jonathan Abram: The man who rejected a $30m sale of Freindster to Google

In a new podcast, Jonathan Abrams creator of social media pioneer Friendster, answers questions on the past and future of digital media.

Aaron Dinin, the host of the new podcast Web Masters, spoke with Jonathan Abrams to discuss Friendster

• Friendster was coded solely by Jonathan Abrams, even after it had millions of users
• The company was a year old when Google offered to buy it for $30 million in shares – these would be worth over $1 billion today.
• After the site was no longer in use, they sold the patents of Friendster to Mark Zuckerberg, the founder of Facebook

Jonathan Abrams created Friendster, the social network before Facebook, after working in Silicon Valley, and dreaming up an idea:

“And it certainly wasn’t something I could have assumed because there wasn’t really anything like it before and it was asking people to kind of change their behavior, to do things that previously that people did not seem to be comfortable with on the internet. So in the early days, I wasn’t really thinking of it right away as a business, because I just wasn’t sure if this wacky idea of mine was going to work.”

Before Friendster was thought of, Abrams was working for Nordel in Canada. Nordel had over 80,000 employees around the world and needed an internal solution to queries, similar to Yahoo. Abrams created ‘Achoo’ which became popular within Nordel, and ultimately led to a promotion to be able to work with Java, and then to work in the Silicon Valley at Netscape due to this experience.

Abrams’ first official venture was Hotlinks – he wanted each person to have their own directory of their favourite bookmarks or websites that they could share with other people.

“So that was the idea of Hotlinks. The idea literally was what we today call social bookmarking. But in 1999, we weren’t really using the social term yet. So instead we called it an online bookmarking community, which is a lot more awkward than social bookmarking, but that’s what we called it back in ’99.”

Abrams explains how he got the idea for Friendster by thinking of a different way to use the internet: “Where you would use your real name, your real photo and your real life social identity would be reflected online. Because when I had moved to Silicon Valley from Canada, I didn’t know anybody. I hadn’t gone to Stanford. I had no network. And within a few years I had raised my first million dollars of venture capital funding for Hotlinks. And the way I’d done that was a lot of networking; going to a lot of events and doing a lot of networking very deliberately because I had to build my Silicon Valley network from scratch since I was from another country.”

“And most of the online services that were popular in the web were anonymous or pseudonymous. They didn’t really reflect anything to do with your real life. So we all know about Stanley Milgram’s small-world theory, the six degrees of separation. What if you could actually reflect online your real life. Bring that real life social context in your real life of maybe it’s your friends, your coworkers, your neighbors, your family, people you know, but reflect that in a different way that the web could work. And I came up with the name Friendster and I built a prototype.”

Amazingly, Abrams coded the prototype himself and he tried to sell it to his friends, but they thought it wasn’t going to work.
“Some friends who asked me, “Jonathan, what are you working on?” I told them, “Well, I’ve got this idea. It’s going to be like a website and you’re going to use your real name and photo and people you know in real life will be on a web page and other people can go and look at it. And then it’ll send you a message and say, are you really Jonathan’s friend? Yes or no. And you’d say yes, and then you’d be added to it.” And people generally thought that was the dumbest idea I ever had”

The way Abrams grew Friendster was to invite his friends who weren’t the people trying to give him business advice, that it was going to fail. He invited friends he hung out with, and thought would might enjoy it. It became a snowball effect, as the invited friends then invited their own friends, and so on.
“And sometimes people were like, “What is this?” And they would ignore the invitation and they would get three more, all with the name of somebody you actually know in real life inviting you to this. So finally they’d succumb, they check it out and then they’d see a whole bunch of people they knew and they just found it very compelling and then they’d start to invite people.”

Of course, with every successful company and social network, there were people who started putting fake profiles up on Friendster. Over a million users were using the platform, and the fake profiles became controversial – users thought that by the admin team removing the fake profiles they were “jerks.” “But in reality, we got complaints from users about the fake profiles. So for every person who thought it was funny, there were five people who thought it was actually interfering with their experience. And ultimately it’s many years since then, but you look at Facebook and it’s a ubiquitous service now used by billions of people and everybody’s using their real name.”

With a quick idea and venture, it went from people being skeptical of the idea to needing to raise money due to additional servers needed, and more members of the team. Abrams managed to get a few investors interested, and then the hard work started.

“I mean, that year was such a busy year because we were not really having fun. I had a small team, we were working very hard because it was growing very fast and it was very challenging scaling it. So we were probably having more stress than we were fun. But by the end of that year, Friendster had grown to millions of users and Friendster had been written about in so many magazines and newspapers and gotten so much attention so quickly as this new phenomenon that we had a lot of venture capital firms who were interested in investing.”

After a year of it being live on the internet, Google offered Jonathan $30 million for Friendster.
Aaron Dinin, host comments: “That’s certainly not a bad outcome for a year’s worth of work. Besides the Google stock he’d have received would be worth over a billion dollars today. But Jonathan also had a bunch of high powered and successful investors telling him they could help turn Friendster into a multi-billion dollar company.

Friendster lost the market to competitors and his decision to reject Google became one of the cautionary tales for startup founders everywhere.”

You can listen to the latest podcast here and read more about the newest episode in the transcript here.

Web Masters, the new podcast set to talk about technology with some of the biggest tech giants across the US and world, is available to listen to on all platforms