PJ Connect - Summary Fact Sheet

Summary Fact Sheet
July 2009

Highly Confidential

Investment Opportunity Friendster is one of the leading Social Networking Sites (SNS) globally with over 100MM users and the dominant player in the rapidly growing Southeast Asian countries. As one of the most trafficked web properties in the region, Friendster has been able to build strong brand equity through a loyal user base. Its robust platform presents a unique opportunity to quickly access and gain scale in the Southeast Asian social networking market. Friendster is owned by a group of venture capital firms including Kleiner Perkins Caufield & Byers, Benchmark Capital, DAG Ventures, IDG Ventures and other individual investors. Investment Highlights Attractive Industry Fundamentals with Strong Economic Potential • Friendster’s key markets (Singapore, Indonesia, Malaysia, Philippines – SIMP), representing a population of approximately 360MM, are expected to experience robust internet user growth over the next few years • Led by increasing interest in online activities as well as new developments in both fixed and mobile broadband technologies, SIMP is expected to maintain healthy internet user growth into the future, especially in emerging markets such as Indonesia and the Philippines Robust Internet User Growth with Significant Upside Potential
Unique Internet Users (MM)

Key Statistics
• 100MM users worldwide • 75MM users in Asia • Top 20 global website based on traffic • #1 Social Networking Site in Southeast Asia
Source Company Data

100 70 40 30 20 10 0 2008 2010 2012
Source IDC Research

CAG R: CAG CAG 5% R: 4. 3 2. 5 % R: 1 5 CAG CAG 9% R: 6. .5%

R: 1 6






15.9 10.1

15.6 16.2






4.2 2008 2010 2012

2008 2010 2012

2008 2010 2012

2008 2010 2012

• Mobile phones are expected to become an increasingly important medium for communications in SIMP given the underdeveloped fixed line infrastructure. Strong projected mobile uptake for these regions represents enormous opportunities for Social Networking Sites, which are gaining in popularity among mobile internet users • Underlying economic trends in SIMP are also compelling, with real GDP growing at an average CAGR of 5.7% from 2005 to 2008 and expected to continue to grow at more than 4% despite the recent global economic downturn, outpacing the projected average GDP growth rate globally
Large and Expanding Mobile Subscriber Base
Subscribers (MM)
500 200 90 60 27.7 30 0
2008 / 2012 Mobile Pen. (%)

Strong Underlying Economies
Real GDP Growth (%)

227.8 130.9 68.2 38.1 110.6
8.0% 6.0% 4.0% 2.0% 5.7% 4.1% 5.9% 4.5%

Global 2005-2008 Average CAGR: 3.3% Global 2009-2012 Average CAGR: 2.9%

5.6% 3.6%

5.7% 3.9%


8.0 Indonesia
55.6 92.7

142.9 169.4

101.7 131.4

75.4 114.0

0.0% Singapore 2005-2008 CAGR Indonesia Malaysia Philippines



2009-2012 CAGR


World Cellular Information Service


Global Insight


Summary Fact Sheet
July 2009

Highly Confidential

Investment Highlights (cont’d) Leading Global Social Networking Site with Dominant Position in Southeast Asia • With over 100MM registered users worldwide, Friendster is a leading global Social Networking Site and a top 20 global website based on user traffic. The website attracts over 100,000 new users and 500MM page views daily • Friendster is also the market leader in user engagement as measured by the average time spent on the website per user, surpassing major websites such as Facebook and YouTube High User Engagement in Asia Pacific (1)
Average Minutes per User per Month
160 120 80 40 0 Friendster Facebook YouTube Google eBay Amazon 52 32 10 148 145 127

Industry Leading Statistics
• Over 100MM registered users worldwide • Over 75MM registered users in Asia • Over 500MM page views daily • Over 100,000 new members every day • More unique visitors in SIMP than any other major Social Networking Site in every age range
Source Company Data

Sources comScore, Asia Pacific Data Sources comScore, Asia Pacific Data Note 1. Excludes traditional portal properties, e.g. Yahoo!, MSN

• Friendster’s user base is especially strong in SIMP, where it is the #1 Social Networking Site
– In the Philippines and Indonesia, Friendster is also the #1 mobile site, a platform that will continue to grow in line with the region’s expanding mobile market • Friendster enjoys strong brand awareness in SIMP as one of the most frequently searched terms on the internet – As one of the earliest entrants into the market, Friendster has been able to establish strong brand equity which has helped it gain key relationships with domestic partners in the region
Friendster’s Dominance in Southeast Asia
Region Philippines Indonesia Malaysia Singapore SIMP Social Network #1 #1 #1 #2 #1 Monthly Unique Visitors 13.1MM 5.5MM 3.6MM 0.9MM 23.1MM Page Views 8.2Bn 2.3Bn 1.4Bn 425MM 12.3Bn Web Site Top 3 Top 3 Top 5 Top 3 Top 3 Mobile Site #1 #1 #2 #6 Top 3

Top 10 Most Popular Search Terms in 2008
Rank 1 2 3 4 5 6 7 8 9 10

Philippines Lyrics Friendster You Games Yahoo YouTube Love Google Mp3 Map
Google Zeitgeist

Malaysia YouTube Yahoo Friendster Utusan Mp3 Google Games Map Lyrics Myspace

Sources comScore, Google Analytics, Company Data, Alexa.com, Opera mobile report

High Barriers to Entry from Strong Technology Platform and Entrenched Position • A strong and scalable technology platform, in addition to a solid network backbone, enables Friendster to deliver content to its users at high-speeds and low costs • The Company also has a growing portfolio of patents (5 granted and 10 pending), which includes established and unique user tools such as Proximity Search methods and Online Content Delivery system based on social networking information • In addition, Friendster has established key relationships with local vendors that would take years for other entrants to form • Friendster’s established history and strong foothold in SIMP, combined with its technology platform and relationship with strategic partners, constitute a substantial competitive edge against its key competitors in the region – Friendster has 3.7 times more active users than Facebook in the SIMP social networking space, and despite the recent growth of Facebook, Friendster’s market leadership position is solidifying – Friendster’s user base in the region has achieved critical mass and will continue to multiply given the nature of social networking


Summary Fact Sheet
July 2009

Highly Confidential

Investment Highlights (cont’d) Share of SIMP Internet Population
% 50%
Friendster 42%

Strong User Base Relative to Major Competitors
Active Users (MM) 25.0

40% 30% 20% 10% 0% Sep-06 Feb-07 Friendster

20.0 15.0 10.0


12.3 5.5 0.5 1.0 5.3 2.3 2.2 1.2 1.0

Facebook 14%

5.0 0.0







Dec-07 May-08 Oct-08


Relative Size 3.7x


Company Data


Sources BMI, Google Analytics, comScore

Established Team with Strong Track Record
Key Management
Richard Kimber Nimesh Shah Andy Spillane Ben Dunn Ian Stewart Karin Visnick David Jones

• Friendster has a top management team with unparalleled
Past Experience in the Media / Tech Sector
Google Fairfax Digital, UUNET, Dell AOL, Yahoo!, Netscape WPP Group MTV Asia Snocap, Yahoo! eBay

Role at Friendster
CEO CFO SVP - Product, Engineering & Ops VP - Marketing and Philippines Ops VP - Global Sales & Business Development VP - Business Ops VP - Product Management

local knowledge and commitment to SIMP – Its global network of offices spans across Australia, the U.S., Philippines and Singapore, totalling 105 employees • The largely local management team, with past experience at leading technology companies such as Google, Yahoo!, and AOL, is committed to growing key markets in the region – CEO Richard Kimber, previously the Managing Director at Google Southeast Asia has extensive experience in monetising opportunities in the internet space – In addition to the management, the Company has strong on-the-ground staff consisting of an experienced direct sales force, business development units and back office support teams

Company Data

Strong Business Proposition with Unique Monetisation Initiatives • Friendster has established a strong and proven track record of monetising its user base through the generation of advertising revenue over the past few years • Friendster has plans to build upon its existing online advertising base and expand into other business opportunities such as virtual goods, online gaming and online surveys; recent key initiatives include: – Partnering with regional mobile operators to provide reduced tariff plans for browsing on Friendster’s websites – Partnering with IDT to launch The Friendster Loop, a pre-paid calling card service exclusive to Friendster’s users – Collaborating with an established online survey provider to leverage Friendster’s user base in conducting surveys – Final stages in creating a one-stop shop for its virtual goods platform – Partnering with virtual goods vendors and financial institutions to design products and streamline payment • Going forward, management expects a substantial portion of its revenue growth to come from new products in the Southeast Asian markets • Other opportunities remain for Friendster to fully utilise its vast user network – Online dating services, classifieds and music services


Summary Fact Sheet
July 2009

Highly Confidential

Contacts More detailed information on Friendster is available in a confidential information memorandum, which will be provided to selected investors subsequent to the execution of a confidentiality agreement. Under no circumstances should any of the directors or employees of Friendster or Friendster’s shareholders be contacted by potential investors. Any inquiries regarding Friendster may be directed to:
Morgan Stanley

Bang Trinh Managing Director Tel : +65-6834-8990 bang.trinh@morganstanley.com

Gregory Thiery Executive Director Tel : +65-6834-6662 gregory.thiery@morganstanley.com

Seung Lee Vice President Tel : +852-2848-7131 seung.lee@morganstanley.com


Summary Fact Sheet
July 2009

Highly Confidential

Disclaimer Morgan Stanley Services Limited (“Morgan Stanley”) c/o Morgan Stanley Asia Limited of 46th Floor, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong has been authorised by Friendster, Inc. (the “Client” or “Friendster”) to issue this summary fact sheet on its behalf in connection with the sale, divestiture, merger or similar transaction involving some or all of the share capital of, or some or all of the business or assets or subsidiaries of the Client (the “Transaction”). This summary fact sheet is delivered on the condition that it is held in strict confidence by you, your directors, officers and employees. Save as expressly permitted in writing by Morgan Stanley, this summary fact sheet must not be photocopied or reproduced in any other electronic or physical form and must not be communicated, disclosed or distributed to any other person in whole or in part. This summary fact sheet is for information purposes only and is being delivered to a limited number of recipients for the sole purpose of assisting such recipients in determining whether to proceed with a further investigation of the Transaction. Neither Morgan Stanley, its affiliates, their respective directors, officers, employees or agents (the “Morgan Stanley Group”) nor the Client, its affiliates nor their respective directors, officers, employees or agents (the “Client Group”) gives any representation or warranty, express or implied, as to: (i) the achievement or reasonableness of future projections, management targets, estimates, prospects or returns contained in this summary fact sheet, if any; or (ii) the accuracy or completeness of any information contained in this summary fact sheet, any other written information or oral information provided in connection therewith or any data that any of them generates. Furthermore, and without prejudice to liability for fraud, no member of the Morgan Stanley Group or the Client Group accepts or will accept any liability, responsibility or obligation (whether in contract, tort or otherwise) in relation to these matters. Any prospective purchaser should make its own investigation of Friendster and all information provided. This summary fact sheet: (i) is not an offer or invitation by any member of the Morgan Stanley Group or the Client Group to purchase or sell securities or assets, whether in relation to the Transaction or otherwise nor any form of commitment or recommendation by any member of the Morgan Stanley Group or the Client Group; (ii) will not, and nor will any other oral or written information made available to a prospective purchaser, other than a definitive and binding sale and purchase agreement, form the basis of any contractual or other agreement in relation to the Transaction; and (iii) does not contain all the information that a prospective purchaser may wish to have in determining whether to enter into the Transaction. The Client will only accept obligations in relation to the Transaction that arise out of a definitive and binding sale and purchase agreement. The provision of this summary fact sheet: (i) does not place any member of the Morgan Stanley Group or the Client Group under any obligation to provide any further information in relation to the Transaction or to update this summary fact sheet or any additional information or to correct any inaccuracies in any such information which may become apparent; and (ii) does not place any member of the Morgan Stanley Group or the Client Group under any obligation to consider or accept any offer, irrespective of whether such offer is the only offer or one of a number of offers representing the highest price. Morgan Stanley is acting as exclusive international financial adviser to the Client in relation to the Transaction, will not regard any other person (whether a recipient of this summary fact sheet or not) as a client in relation to the Transaction and will not be responsible to anyone other than the Client for providing the protections afforded to clients of Morgan Stanley nor for providing advice to any such other person. Any person considering entering into the Transaction: (i) may not rely on this summary fact sheet in determining any course of action in relation to the Transaction or otherwise; and (ii) must seek its own independent financial advice. Without prejudice to liability for fraud, each member of the Morgan Stanley Group and the Client Group disclaims any liability which may be based on this summary fact sheet or any other written or oral information provided in connection therewith and any errors therein and/or omissions therefrom. The distribution of this summary fact sheet in certain jurisdictions may be restricted by law and, accordingly, recipients of this summary fact sheet represent that they are able to receive this summary fact sheet without contravention of any unfulfilled registration requirements or other legal restrictions in the jurisdiction in which they reside or conduct business.


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