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Friendster, the social network that’s big in Asia, has launched an OpenSocial version of its nine month old developer platform. This means any application that is already built to the OpenSocial social network developer platform specifications will now more easily work on Friendster; various versions of OpenSocial are already in place on MySpace, hi5, Orkut, and other social networks.

San Francisco-based Friendster first rolled out elements of its own developer platform last October, and some developers have told us they’ve already seen substantial growth on it. The company claims more than 10 million of its 75 million total (not monthly) unique users have added at least one app, with nearly half a million apps being added to Friendster user profiles per day.

Thousands of developers have registered for the company’s developer program, and more than 450 apps have been deployed. Friendster, like other social networks, regulates which apps can go live on the platform. Forthcoming OpenSocial apps for Friendster will need to go through the screening process — successful ones will, among other things, appear in the company’s app gallery for user perusal (screenshot above).

Friendster, the formative social network of the modern web era that became a verb for rollercoaster failure and then took over large chunks of the Asian market, has some good news this evening.

It has raised $20 million and plucked Richard Kimber, Google’s regional managing director for South Asia, to be its new chief executive.

IDG Ventures led the round, with existing investors Kleiner Perkins, Benchmark Capital, DAG Ventures and Founders Fund participating.

While Friendster is the largest social network in countries like Malaysia, the Philippines, Singapore, Indonesia and other countries, it is — like most of its rivals — still figuring out how to be a big business. Kimber has experience making money for Google in South Asia. It’s not clear if that includes Orkut, Google’s social network that’s popular in India (and Brazil) or other social Google properties.

ComScore stats on Friendster, from June:

22.1 billion page views per month

215 minutes per visitor per month

37.1 million per month, 33 million of which were in Asia

[Photo via ABC.]

In the current international land-grab among leading social networks, Facebook is overtaking MySpace as the largest social network in the world. But there’s a big caveat — Asia — where a much-maligned older rival, Friendster continues to lead Facebook and everyone else by at least a two to one margin. The most recent data: This past April, Friendster clocked 36 million users in Asia, versus a distant second Facebook at 18 million.

And unlike social networking in the U.S., the opportunity in the Asian market is growing as more and more of the region’s 3.8 billion residents come online.

Friendster, because of its growth in Asia, has seen its user base nearly double from 23 million monthly active users in April of 2007, to 40 million users this past April, according to comScore. That growth rate seems to be increasing, as the company has added 10 million of those users since December. Friendster also points out that comScore doesn’t account for users who access the site through internet cafes. Internally, it says it sees range much higher in many countries.

Meanwhile, Friendster users are spending an average of 229 minutes on the site per month, the highest of any social network, according to comScore data from March.

This is looking more and more like a happy ending for the San Francisco-based company, which, as many of our long-time readers know, has seen many ups and downs over the years. Nearly from the start, it has been wracked by painful internal issues, including management conflicts, investor conflicts, technical problems, and mixed messages to its users about what was acceptable on the site.

It gradually ceded grounded in the U.S. to MySpace and Facebook, both of which now dominate the market here. But because the site had become popular with many Asian-Americans in the Bay Area during its early days, these users shared the site with family and friends in other parts of the Pacific.

A shot at the mainland China market?

The international friendships between Friendster users appear to be giving it an ongoing boost in Asia, with 23 percent of an average user’s friends located in a different country. This growth is happening across major Asian ethnic groups. With the site’s recent growth across countries, it may become the go-to social network for large portions of Asia, including Indonesia, Malaysia, the Philippines and Singapore

Most especially, it is the site’s popularity with Chinese speakers outside of greater China that may be give it a better chance of reaching users in the country. Among its international competitors, Facebook is contemplating how to introduce its Chinese-version site without inviting government censorship, and MySpace has been pumping money into its China site.

But life for internet companies in China is especially complicated. Domestic social network offerings from established companies like QQ and younger startups like Xiaonei and 51.com appear to have already grown prohibitively large. I say “appear” because there is little reliable data about any social networking traffic in China, so I — and many China observers I’ve spoken with — tend to doubt any internal numbers given by companies in the country.

Still, from what I hear, Friendster, like MySpace, is seen by the Chinese government as an entertainment site, not so much a place that foments political dissent. (Meanwhile, I hear Facebook is seen by the Chinese government as being about real-world connections — something I’ve argued — real world connections that could foment dissent.)

The best shot at the rest of Asia?

Regardless of what happens in China, the site has already launched versions in both simplified and traditional Chinese, Indonesian, Japanese, Korean and Spanish. Today, it introduced a new version in Malay (see screenshot below), and has also recently added Vietnamese. It plans to translate the site into more Asian languages. Note: When I asked Friendster executives about its plans beyond Asia, I got a roundabout answer about Asia’s promise — so I’m guessing Asian users can expect 100 percent of the company’s attention.

The site has been aggressively launching other features, including a “fan page” for musicians and others to promote themselves to Friendster users similar to Facebook’s “Pages.” It has also been building out a developer platform, starting last October. We’ve been hearing positive things about it from some big third-party developers, including Watercooler (which counts Friendster as its second largest platform, with 1.5 million total users), Slide, and others. The platform has been live since December, and while it was developed before the Open Social effort to standardize developer platforms came into being, Friendster was a founding member of that movement. There are more than 350 third-party applications, with thousands of developers working on the platform, the company says.

Friendster’s executives attribute its recent growth to a composite of its demographics and new features like its pages and platform, along with its new mobile version. As we’ve written, large, web-based social networks appear to have a strong advantage over mobile-only social networks, so expect Friendster to continue to do well on this front, too.

There’s another interesting angle to Friendster, and it has to do with making money — but not ads. Many Asian gaming companies and virtual worlds are already basing large portions of their businesses on virtual goods. With an established user base of people who are used to spending money on virtual goods, the company is primed to introduce this sort of feature. Maybe in the form of sending virtual gifts to friends for a small fee, like what Facebook already offers — but with a lot more users who care to do so. I’m not sure exactly what the company is going to introduce, at this point, as it isn’t saying much.

Meanwhile, as the number of internet users in Asia continues to grow — and gain more wealth, expect Friendster to do very well for itself. Indeed, if it maintains its lead in Asia, it may one day be larger than Facebook or MySpace.

Note: Friendster created the comScore-based graph at the top of the article. I’m using it with their permission.

Friendster and Bebo are joining LinkedIn as the latest large social networks to throw open their web sites to outside developers.

Like Facebook, and a recent effort led by Google to do something similar with its “OpenSocial” project, these sites are letting third parties build applications for their pages. By recruiting other developers, the social networks are hoping to stimulate a barrage of activity — letting developers access data about users to create helpful services.

This, in turn, is expected to bring new advertising and subscription opportunities back to the networks.

Facebook, and now LinkedIn, Friendster and Bebo have each created a richer set of application programming interfaces (APIs) than offered by OpenSocial. OpenSocial, announced last month, is by many accounts a work in progress.

The value of any of these social networking platforms are open to question. Results have also been mixed for Facebook’s platform,.

Fewer than one hundred Facebook applications are even earning their developers a decent living, from what we’ve heard in the past. The results aren’t due to lack of effort on the part of developers: There are nearly 11,000 Facebook applications today.

Of course, applications designed to entertain, such as iLike’s music fan applications or RockYou’s Superwall, have managed to get millions of Facebook users, with hundreds of thousands using the application each day. Those companies are figuring out how to make money, and claim some success, although they haven’t revealed revenue numbers.

Business-focused application have not been a hit with Facebook users, as far as we know — not even something simple, like a group to-do list. But maybe work-related applications aren’t a good fit with Facebook, which has its roots as a social diversion for college students.

On Monday, business social network LinkedIn began testing that idea. It announced a platform (our coverage) built around its set of data about your business relationships, that other business-focused companies may want to access. Business Week, for example, has already built an application that shows you how you’re connected to people and companies in the publication’s stories. Data-sharing has long been part of LinkedIn’s strategy. Note: You can already pay to put your LinkedIn data in your Plaxo or Salesforce account.

On Tuesday, Friendster introduced more features for its developer platform, which launched late October (our coverage), including a directory of more than 180 third-party applications. Friendster’s platform is also a work in progress. For example, it apparently doesn’t enable voice connections on third party applications, although VoIP companies have had widgets on the site for years.

Today, Bebo will launch its own developer platform, as was mentioned in a couple blogs yesterday. From what our sources tell us, it will be very similar to Facebook’s platform, with a markup language and structure so Facebook developers can easily port their applications to its site. It is designed to integrate with OpenSocial as the latter’s development catches up.

Bebo has developed its own focus: distribution deals with large media companies, and entertainment features aimed at teenagers.

Separately, Bebo has already launched its “Open Media” platform (our coverage), a set of pre-built applications designed to give large media companies an inside track for distributing their copyrighted audio and video wares.

Where does this leave OpenSocial and its long list of partners? Google has put some serious brains on improving it, including Graham Spencer, the chief technology officer of JotSpot before Google bought it. JotSpot itself was designed to be an “application wiki” that allowed users to both select pre-existing JotSpot applications, such as a simple calendar or task-tracker, or build their own on top of it.

There are opportunities for many different types of companies to take advantage of the newly-available relationships between people present in these social network. How much those opportunities are worth is the next question.

Tomorrow, I’ll be moderating a panel on how to turn these apps into businesses, at an open house put on by Social Media in Palo Alto, California (more on its Facebook group, here ).
[With a hat tip to Nick O'Neill.]

Friendster, the social network that has been forgotten by many in the U.S., but which is thriving in Asia, is now opening its own developer platform, copying the move recently by popular site Facebook.

Third parties can build applications within Friendster, and can access the site’s user data. Other sites, from MySpace, Google to Hi5 are all planning similar moves. Friendster is letting developers start building now, but not letting the applications go live until November 30.

Friendster is a large and growing social network, with 26.5 million active users worldwide in September, according to Comscore, up from 15 million a year ago (see table, below).

The widget-makers that first built Flash widgets in Myspace, then built somewhat more complex applications in Facebook, are already pouring into the Friendster frontier, we’re hearing.

The key to success, as was seen during Facebook’s platform launch in May, is to get an application growing as soon as a platform launches. As RockYou and Slide showed then, an initially successful application can then serve as an advertising vehicle for the company’s other applications. As users use an application, their friends can see this (via feeds that track friend activity), and they may be tempted to try it, too. Applications can also market other widgets by including actual ads linking to them within the interface.

In other words, the more users an application gets, the more opportunity to continue growing. Successfully implemented, one or two successful applications can lead to an application empire on a social network. It’s a classic case of first-mover advantage.

Third-party developers know this, and some will go to extreme lengths — spamming users with scores of application invites, for example — to jump-start their user bases. This anti-user behavior was seen in the Facebook platform initial gold rush in May and June. One thing to watch upon launch is whether or not Friendster has watched and learned from Facebook’s foray — whether it will have designed the platform to protect users from this behavior.

The bigger play here is for the most successful widget-makers is to push their applications across social networks. RockYou and other ad networks like SocialMedia are making money by selling links and advertising space on the pages of successful applications. They’re selling these links to new apps, which buy them to get publicity. Slide, meanwhile, is experimenting with ways for users to include branded digital images within their Slideshow application. The more real estate on more social networks, the more space to test out these experiments in advertising.

Hopefully soon, we’ll able to see just how profitable these widgets can be.

updated

Friendster, the early social network that stumbled badly three years ago and gave up leadership status to MySpace, Facebook and others, continues to recover — and its 40 percent page view boost last month is remarkable.

The site had 24.7 million unique users last month, according to the latest Comscore data for global traffic just released. It lags behind leaders such as MySpace and Facebook (see chart below), but it is holding its own among the large pack of second-tier social networks of size, including Bebo and Piczo, as it grows in places like Malaysia and the Philippines.

The site’s page views, though, grew to 9 billion, a whopping 41 percent in May compared to April. At first glance, this suggests some mistake, or worse, a scam. We talked with David Jones, vice president of marketing, and he said the boost was coming in a number of ways, but assured us they are legitimate. The site has made a number of changes over the past two months. The biggest is that it has finally managed to fix the technology that had slowed its growth in 2004: Its “graph server” allows it to see how you are linked to your friends through three degrees (allows you to control relationships with your friends, their friends’ friends, etc.). The graph plagued Friendster at first by creating too many variables to track. It has been fixed to be able to manage four quadrillion possible configurations.

Aside from that, Friendster is driving page views in other ways. Just as on Facebook, when your friends change their status, such as add a friend, that information gets updated on your profile. The system also defaults to sending you an email with those changes weekly — prompting you to click through to Friendster, and creating still more page views. It has added a classmate function, to track people you may have gone to school with. It has added a classifieds section. When you sign up with Friendster, it will prompt you to add your contacts from your address books, and tell you who is not already in Friendster and prompt you to invite them. This, of course, drives still more page views as those friends click into to see your invite. And yet, while many of these features drive up page views, and may seem artificial, they have become pretty standard at other sites.

The company is still not profitable, but is poised to be soon, Jones said.

Socializr, a new San Francisco-based company that wants to help you plan events online, opens to the public today.

It is owned by Jonathan Abrams, the founder of the early social networking site, Friendster. When Friendster emerged four years ago, it was cutting-edge — creating enormous buzz in what is now a booming industry. Friendster badly fumbled its opportunity, though, losing its lead to MySpace and Facebook.

Now Abrams wants to make a comeback. We’ve just tested Socializr, and it works smoothly. It doesn’t try to do too much, like many new competitors. It does have a host of modern features you’d want, like the ability to upload video, photos and other widgets straight into the invitation you send out to friends.

This time, Abrams faces even more of a challenge than he did at Friendster: A host of competitors, from industry leader Evite, to small start-ups such as Renkoo, MingleNow, Skobee, and more recently Mypunchbowl and related site, SuggestLocal, to name only a few.

Many of these new sites, though, have the problem of being too complex.

Here’s how Socializr works: When you sign up, its gives you a number of options. It asks you to supply all your email addresses (you don’t have to give them) so it can search for other information you may have on other sites (Friendster, MySpace, Flickr, etc) to bring into your Socializr profile. It lets you import your address books from other places, such as Yahoo and Gmail, to simplify the process of sending invitations to your friends. It also gives you your own Web site URL, in the form of www.socializr.com/user/name, where you can keep all of your events and let other people see them, if you want.

To send out a new invite, it handholds your through the process. See below for a sample template. To help you choose a location, it has a convenient “search” feature: Type in your zip code, and “chinese,” into the search bar, for example, and Socializr provides you all of the Chinese restaurants in that zip-code. You select one of them, and Socializr inserts the location into the invite. You can customize your invite, to include photos, videos from around the Web (it lets you use VideoEgg to do this), and a host of other widgets.

We first covered Socializr in September here, however the site was still closed to the public.

Socializr has raised $770,000, according to WSJ. The money comes from Rembrandt Venture Partners, and a number of other Silicon Valley players, including Frank Caufield, Jeff Clavier, Colin Evans, Josh Felser, Auren Hoffman, Kent Lindstrom, Richard Ling, Alex Lloyd, Melissa Lloyd, Andrew Lowenstein, Michael Tanne, Jeremy Wenokur, and some others. (Felser, Lindstrom, and Lowenstein were original investors in Friendster.)

It is a three-person team, and has been in testing mode since Sept 2006.

In January, Abrams made some clarifications to our original piece on Socializr. He said he’d wanted Friendster to offer an event invitation feature, but that it had never built one. He’d only raised one round of funding, he added.

The site will rely for now on text advertisements from Google, reports the WSJ.

Despite fallout at social networking and other Web 2.0 companies lately, its clear that the problem isn’t lack of opportunity. Many companies still see strong growth ahead.

Check out social networking veteran Friendster.

The company lost $410,000 in December, according to documents a source just slipped to VentureBeat. Revenue was a decent at $700,000, but overhead was $900,000, and other depreciation costs made up another $200,000 or so. The company’s books project monthly losses until July of this year. But there’s a reason for this: Good side is, at this burn rate, Friendster’s $10 million raised in August should see it through until break even. And David Jones, Friendster’s VP of marketing, says this is all part of the plan. The company is spending more now to grab customers, and its seeing traffic at an all-time high, with six billion page views a money, and nearing 16 million unique users — “We’re a top 30 global web site. We’re doing fine,” he said.

Indeed, shakeups maybe rattling other companies, but in some cases its precisely because the companies don’t want to squander what appears to be significant growth ahead.

Take Backfence, the community news and review site. It confirms news of layoffs that have circulated a while, and that chief executive CEO Susan DeFife has resigned. Co-founder Mark Potts tells VentureBeat the board asked him to take over, and implement a “course correction.” The board, and Potts is a board member, wants to grow more quickly, he explained. There are signs advertisers are starting to sign up on community Web sites, and Backfence’s board feared it wasn’t moving aggressively enough — still serving only in 13 communities, when it could serve many more. Also, it hasn’t upgraded its technology quickly enough, still running photo gallery technology it built two years ago, instead of implementing Flickr streaming, for example. They plan to implement more video and social networking aspects, too, Potts said. He wouldn’t confirm the number of layoffs — but said reports (see Paidcontent.org, for example, and The Local Onliner) of the 12 layoffs out of a total of 18 employees is wrong.

Anne Raimondi, vice president of marketing and product, confirmed Insider Pages had cut 20 of its 30 employees. Here too, though, the company is still seeing growth, with traffic up double digit in December and the first days of January — in part because the site has optimized its site better, she said. Costs were too high, when compared to the company’s revenue projections, which is why the cuts were made, she noted.

Orb Networks: Co-founder Joe Costello takes over from Jim Behrens as chief executive of the company, which lets you transfer your TV and other media to any devices while you’re on the go. We spoke to Gary Morgenthaler, an investor in Orb, last week, who told us Costello has experience growing companies through partnership building. He said Orb’s recent second release, already with half a million downloads, is picking up nicely. It works with a mere software download — in contrast to competitor Sling’s requirement of a hardware box — and there’s a free ad-supported version. The company is seeking $30 million in a new round of venture capital.

(Updated with more details on how FF works)

A form venture capital funding in Silicon Valley is getting increased interest from founders of start-ups.

It is called the “FF class” of stock, for founders who want to cash out a small percentage of their stake in a company so they don’t have to wait until the company is sold or goes public.

This practice is not entirely new. Many founders through the decades, including at Intuit years ago and Jonathan Abrams at Friendster more recently, have sold shares in their company to their venture backers and gotten cash to enjoy life a little more. But with the favorable start-up climate now, VCs are doing more to accommodate founders, entrepreneurs are getting more sophisticated, hearing more about these sorts of terms, and increasingly asking for them.

The practice is mentioned in the SF Chronicle story by Jessica Guynn, about the Sean Parker of the Founders Fund (the fund’s partners pictured above) and his decision to devise such a stock for Barney Pell, founder of young search start-up Powerset:

Inspired by his personal frustrations as a startup founder, Parker came up with a novel arrangement that he hopes will benefit other founders as they build their companies: a new type of stock that allows founders to cash out a small percentage of their stake in a funding round so they don’t have to wait until the company is sold or goes public.

Pell, who maxed out credit cards, deferred salary and considered taking out a second mortgage until he could raise serious money and interest from the right investors, says he’s relieved that he and his fellow founders don’t have to feel rushed to sell the company to get some return on their investment of energy, time and money.

This Powerset iteration was put together by attorney Steve Venuto, of Orrick, and VentureBeat has been told that Fenwick & West and Wilson Sonsini have also given thumbs up to the practice. Venuto was also the lawyer of Facebook, another company backed by the Founders Fund’s Peter Thiel. (Someone told us Venuto also the only lawyer in the valley who can code, but we haven’t confirmed that.)

The amount of the cash-out is capped to between 10 and 15 percent, depending on the round. It should also be used with caution, because it means you get less as a founder when the company does get sold or go public. There’s a story we’ve heard about the founder of Viaweb, a Paul Graham company, who cashed out in order to buy his wife a Saturn car. It became known later as the “million-dollar-Saturn,” because of the worth that stock would have been had he kept it.

Thestock also lets the investors cash out too, allowing venture capitalists take some money out of the company during a subsequent higher-value round.

The stock type is also significant because a new law, 409A, forces companies to grant options at their fair market price. This brought more scrutiny on the cash-out process. We ran this by Gordy Davidson, of Fenwick & West, who explained the challenge as follows. If a VC buys shares from a founder for $1 each, to let the founder cash out, this effectively establishes a fair market price for the shares. All option grants going forward must thus be granted at $1. This may not be good, because companies may have been able to grant options to employees at 10 cents had no such price been set (this lower price is desirable, because it gives greater upside). The trick is to turn the founders stock into “preferred” shares, which can get around that problem. That, in turn, has some tax implications, but of course — with good lawyers — there are even ways around that.

So here’s how Parker and Venuto structured the FF class (Parker and Thiel named it “FF’ and the name stuck): The FF has a single preference clause that distinguishes it from all other stock. It is convertible to any future class of stock, when certain conditions are true. For example, the holder of FF can convert it into say, a Series B class of stock and sell it to investors, at which point it takes on all the rights and preferences of Series B stock. But it can only be done during the new issuance of that Series B, and only when that Series B is sold to investors; you can’t convert randomly.

Parker tells VentureBeat he spent nine months thinking about how to align founders’ interests more closely with venture capitalists, and this is what he came up with. The stock was first used at Powerset, and has since been used at a secretive companies Philotic in Berkeley, and David Sack’s Geni (no web sites).

[Pictured above is Ken Howery (left), Peter Thiel (middle) and Sean Parker (right). Photo by Chron's Katy Raddatz]

Roundup:

Entrepreneurs who have two companies – The Mercury News has a story summarizing the exploits of the guys with two start-ups, Kevin Rose & Jay Adelson (Digg, Revision3), Scott Rafer (MyBlogLog, Mashery) and Evan Williams (Odeo, Twitter). The idea that one is not enough, because you want to hedge your bets.

Venture capitalist George Zachary, who backed Odeo, doesn’t seem impressed: “As an investor, I like to see someone who is 100 percent committed to one company,” he tells the Merc.

YouTube stirs ruckus by giving user data to Paramount lawyers — The popular video-sharing site has been tracking personal data and sharing it, according to MarketWatch. YouTube handed over data to Paramount Pictures on at least one user:

On May 24, lawyers for Viacom Inc.’s Paramount Pictures convinced a federal judge in San Francisco to issue a subpoena requiring YouTube to turn over details about a user who uploaded dialog from the movie studio’s “Twin Towers,” according to a copy of the document.

YouTube promptly handed over the data to Paramount, which on June 16 sued the creator of the 12-minute clip, New York City-based filmmaker Chris Moukarbel, for copyright infringement, in federal court in Washington.

However, Fred Von Lohmann from the EFF, says it is a poor reporting job by MarketWatch, and the problem is with the DMCA, not with YouTube’s privacy practices.

French government now assisting Web 2.0 companies — We recently got an email from Trade Attaché of the French Embassy asking if we’d meet with Yoono during a visit to the Bay Area. We find it notable world powers are helping market their Web 2.0 companies. By the way, the U.S. State Department helps U.S. businesses do this sort of thing abroad, too. Difference is, valley-based start-ups don’t get the state to help out with PR here — so you could say the French have an unfair advantage on U.S. turf ;)

Yoono is a social search engine that makes finding interesting new sites and people related to what you like instantaneous and easy. Yoono integrates with your IE or Firefox browser to instantly suggest similar sites and people sharing the same interests while you surf. Unlike StumbleUpon or Delicious, Yoono’s toolbar requires no effort for users - no tagging, typing keywords or changing interface.

Friendster still chomping on its patents — Friendster President Kent Lindstrom got back to us on our question about how the company plans to use its second patent on social networking. We’d pointed out that we didn’t see any mention of audio or video in the patent language, areas Friendster seemed to be claiming it covered. It covers uploading content and associating it with someone you are connected to on an online social network, and Lindstrom says the patent wording can be extended to cover audio and video. While the company remains unsure of its plans to exploit its patents, the company is engaging Robert Barr, director of the Berkeley Center for Law and Technology, to get advice on whether to start litigating or not, Lindstrom said. Moreover, Lindstrom said the company is “going to build a portfolio of patents.” He said Facebook’s “feed” product, which lets users see updates made to their friends’ profiles may fall under another of Friendster’s patents, which is probably a year away from being granted. “It could fall under the patent,” he said.

Apple is readying a music phone — So says Prudential Equity Group analyst Jesse Tortora, who also said Apple is readying a separate, combination video and music phone. Tortora expects Apple to introduce the devices in January at Macworld, and that one of the phones will offer WiFi connectivity — and will be readily available in the second quarter of next year.

Video conferencing suddenly everywhere — Cisco and Microsoft have just unveiled ambitious video-conference products. But what ever happened to Microsoft’s Placeware product, bought for a considerable amount three years ago, supposedly a competitor to WebEx? One difference is that this new version is a tabletop device, called the RoundTable, and will debut next year. And then there’s Cisco’s new product, called the Telepresence. The HD-based system costs a whopping $79,000.

Box.net raises more funding — The seven month old online storage company is nearing 500,000 registered users and gets funding from DFJ. See our story here.

Gary Rivlin, of the New York Times, has just written the best overview yet of the terrific bungle of social networking company, Friendster.

Jonathan Abrams, founder of Friendster, had a great initial vision, and sparked the social networking revolution by allowing friends to hook up with others. The company had an amazing lead, and potential.

But when he took money from high-profile venture capitalists, he paid a high price: These mostly “50-year-old white guys” had their own ideas about how to run the company, and they got more heavy-handed when they realized how much Abrams was “over his head.” In short, everyone was a fault, and it is a great lesson for entrepreneurs.

Here is the tragedy: Had one coherent vision won out, either Abrams’ initial vision for the more “closed” version limiting people to communicate with profiles of their friends, or the more open model adopted by MySpace, the company may have succeeded. Had it forcefully implemented the “closed” version, with conviction, it would have learned, like Facebook did, that gradual opening to others made sense. It could have evolved as it learned. Instead, it seems, the company was mired in indecision. Each executive change (happening every six months to a year) meant a new strategy, a change of course. And once Abrams was out — however arrogant he may have been — so was Friendster’s soul.

Aside from caution, the story also offers hope: If you’ve got a good idea and vision, you can succeed against a seeming formidable competitor that has all the money and best minds at its disposable.