MOL acquires Friendster – a sign of things to come? (Think PayPal acquiring Facebook)

We don’t usually comment too much on web trends (aside from posting up videos of cute babies every so often), but this particular topic is close to home simply because…

A. we’re Malaysian and …

B. We believe commerce via social networking is the way of the future.

Anyways, I just got back from the official launch (Thanks to Cheryl for the invites) and I’m still reeling at the possibilities that this acquisition can offer. Aside from the instant international brand recognition that MOL gets, and the momentum of Asian companies acquiring well-known international brands, there is one other big undercurrent that most people today seemed to have forgotten in the hoo-ha. And it’s called the Friendster Wallet.

I just revisited my Friendster account recently, after receiving an email notification that some things have changed. The interface is a cross between Facebook and MySpace – sparse and interactive, but with room for customization. However, the interesting thing is the Friendster Wallet.

Powered by MOL e-Points (duh), the Friendster wallet enables you to purchase Friendster Coins, which at the moment can be used to buy little virtual gifts, and that sorta chintzy stuff. If you’ve used Facebook before, they have similar features, and at least a gazillion apps that let you do the same thing. But….

Anyone care to play spot the difference here?

The difference is that Friendster has a common currency. That might not seem like such a big deal, until you realise that the main reason you don’t buy so much stuff online is because keying in your credit card information to pay for a US$1.00 flash game is so damned troublesome, with the forms, the redirects, the security confirmations, your codes, and not least of all, your 16 digit (count em) CC number.

It’s a problem that we ourselves face as well. Take that barrier away, and you make every transaction a one-click impulse.

Buy a box of virtual chocolates for Pete’s birthday? hmmmm… yea sure… why not. *click*

versus

Buy a box of virtual chocolates for Pete’s birthday? hmmmm… ok, lemme just get my credit card out… and see … hmm… yea 5434, 8832…. and full name? Ok…. expiry date… check… ok redirecting…redirecting….full name and birthdate again? WTF?!

One of the biggest challenges is ease-of-use, and by having a common currency, MOL has made buying stuff on Friendster as easy as buying stuff off the iTunes App store. Now THAT’s powerful. It’s a strategy MOL has already put to good use in MMORPGs, where their players are already buying up some US$20 in virtual good a month.

By buying out Friendster instead of simply working with them, MOL can now call the direction of the website to encourage more types of interactions that could involve gifts (like the Birthday gift trigger when you write on a friend’s wall if it’s their birthday). 

If MOL can get the same sort of returns (that they currently get from MMORPGs) on even 10% of Friendster’s 115 million users (half of which visit at least once a month), that’s some serious money.

Social networking sites should listen and learn. After all these years – your site might actually have come across a business model that works.

We’ll see.