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Friendster Patents May Impact Peer Networks

"Friendster Inc., known for bringing people together, could wind up making enemies among its peers," The Wall Street Journal says, referring to the patent the social network recently won that searches for people based on their relationships. Friendster is in a quandary about how and when to act on its newfound power. It expects another patent to come through soon. Lawsuits seem likely: "We want to protect our intellectual property," Kent Lindstrom, Friendster's president, says. "We're evaluating what we should do." For Friendster, once king of the social networks, patents could be a crucial asset in the company's bid to reinvent itself. Sites like Facebook, News Corp.'s MySpace, and LinkedIn, a business-related social network, have stolen market share. For more than a year, Friendster has been unable to grow--stuck at under 1 million users--while MySpace, with its 100 million users, grows at more than 250,000 a day. Facebook, the site for high school and college kids, has 8 million users. "We went through a lot of ups and downs," Lindstrom says. "Strategically, we weren't sure where we were going." Now the appropriate question is: where are you going now?

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