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Friendster overture not endearing to all

Recent mass e-mailing that angered some customers shows just how intense the competition is getting among social networking sites.

Friendster recently sent a mass e-mail to try to make new friends for its social network. Instead, it made some enemies.

The one-time hot spot dug deep into its network to pull out the e-mail addresses of people who didn't initially respond to friends' invites to join the online social network a year or more ago. The e-mails implied they were coming from a friend when, in fact, they were being sent by the company.

The e-mails, which went out during the last two weeks, show just how tough the competition is getting for Friendster as it battles growing online giant


What's new:
Online social networking site Friendster angers some with mass e-mail overture to make new friends.

Bottom line:
The e-mails, which some labeled as spam, illustrate how competitive the social networking market has become.

More stories on online social networking.

Some of the vocal Web community responded by calling the mass e-mailing spam.

"I could think of about 10 different ways for Friendster to improve itself, but spamming those who didn't care to join in the first place isn't one of them," said Adam Finley, who publishes the blog AdJab.

Friendster spokesman Jeff Roberto called this a misconception. "We're not in the business of spamming," he said. The campaign, he added, was a one-time mailing to people who were once invited but never joined the network.

The e-mail was designed to communicate with people who may have missed invites because of technical difficulties on the site, or may not know about new features, such as blogs, video and file sharing. Those who received the notices, including nonmembers, have ample chance to opt out of Friendster e-mail, he said.

Friendster, started in 2002, was one of the earliest online social networks, drawing people to build a profile, invite friends and meet friends of friends along the way. But the company's popularity has waned as it has cast about for a good business model.

At the same time, the popularity of social networks such as MySpace has exploded. Also started in 2002, MySpace was a social network geared toward the Los Angeles music scene, but it quickly became a hub for people aged 14 to 20. The site has amassed roughly 33 million members in two years.

What's more, MySpace's traffic has jumped 840 percent in the last year. From September last year to this year, rose from 1.85 million visitors to 17.47 million unique visitors per month, according to research firm Nielsen NetRatings. That doesn't count repeat visits.

From September 2003 to March 2004--during the height of Friendster's popularity--it drew more than 1 million unique visitors per month, according to Nielsen. But since then its traffic has fallen to roughly half that. In September, it attracted 585,000 unique visitors.

Advertising dollars at stake
What's at stake is a bigger piece of the growing online advertising pie on members-only community sites such as MySpace and Friendster. Marketers are realizing that coveted young consumers are spending hours on these sites. As a result, advertising placement and spending in online communities have risen about 300 percent from September 2004 to September 2005, according to Nielsen's AdRelevance, an advertising research arm.

For MySpace that means ad spending went from about $1.9 million in September 2004 to $36.69 million in September 2005, according to AdRelevance estimates. But for Friendster, ad spending on "placements"--which are traditional banners as opposed to search-related ads--dropped from $192,800 to $161,700 during the same period, according to estimates by AdRelevance.

That may be why Friendster has reconfigured itself during the past year as more of a dating or personals site, while adding features like blogs and photo sharing. According to its Web page, the site has roughly 21 million members.

Much of Friendster's changes are designed to keep stride with heavy competition among other, emerging social networks and stalwart communities such as Yahoo's Geocities or Google's Blogger. Falling off the radar in the business means losing out on a boom in online advertising targeted at social networks.

"It's becoming a very competitive landscape," said Gerry Davidson, senior media analyst at Nielsen's AdRelevence unit. "Clearly with lots of competition, online marketing can be more entrepreneurial. Going against the grain may be more prevalent."

Still, Friendster isn't the only network to use personalized e-mail to entice new users. Companies including LinkedIn and Plaxo have been known for sending e-mail with the names of friends to prospective members of their business networks.

What galled some people with Friendster's recent marketing was the use of friends' names in the e-mail and the length of time since the original invite.

In some cases, people who were invited to rejoin figured out that, although it appeared the invites were sent recently, the contact had been initiated more than a year ago.

Friendster's Roberto said that the company initiated a "reminder" campaign policy about seven months ago. As part of it, it began notifying people three and seven days after they had been invited by friends to join the network. It decided to do the latest e-mail for older invitees only once.

He said that people responded well to the campaign and that traffic is trending upward. "It's been a net positive for us."

CNET's Alorie Gilbert contributed to this report.