Ask any young (late teens - early twenties) user of MySpace why Friendster failed, and it is simple: the site was too slow and did not work right. It was obvious to me - I could hardly stand to use it, because it was aggravatingly slow. I have long forgotten my username and password, and I have no reason to go back.
http://www.nytimes.com/2006/10/15/business/yourmoney/15friend.html?_r=1&oref=slogin
This is a great article in the NYT about why friendster failed: they focused on all the wrong things. They spent all their time discussing how to become the next Google or Yahoo!, while they could not even keep their web site running. They surrounded themselves with the highest profile figures in the valley, casting a great vision for the future, all the while failing to execute on the most core part of the company: the web site.
This is a great story to read for anyone interested in entrepreneurship and especially for those thinking of starting a web company and raising money to do it. In the end, building a business is all about execution and customer service, not about bringing high profile people and creating buzz. Friendster had the best team, the top board members and more buzz than Google or Yahoo, yet they failed to execute and focus on what customers wanted - a web site that worked!
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