Matt Marshall over at Venture Beat has a post up about Friendster with a “returning from the dead” kind of vibe: Matt points out that the site — which is kind of the poster boy for early social-networking success, followed by equally rapid failure — has had what he calls a “massive” 40-per-cent jump in page views in May, to 9 billion (Facebook gets about 11 billion a month).

Of course, Matt also explains most of the reason for that growth by saying the site has adopted similar techniques as are used by Facebook and MySpace — which generates a mind-boggling 3 billion page views every day — including forcing you to click multiple times to get anywhere. Is that something to be proud of? Not in my book. There’s also a table in Matt’s post that tells a different story — and what I think is a far more worthwhile one when comparing sites: it’s a table of unique visitors at the different social networks.

Over the past six months, Friendster’s unique visitor numbers have grown by about 30 per cent, while MySpace’s have grown by about 20 per cent. And Facebook.com? Over 100 per cent in the same period, and close to 30 per cent in the last month alone. To me, that’s the whole story right there — something I wish Megan McCarthy had pointed out at Valleywag instead of just pointing to Matt’s post. I wish we could get away from the focus on page views.

If I were an advisor to a startup, or a venture capitalist like Paul Kedrosky or Rick Segal or Fred Wilson, I would clip and laminate the story from today’s New York Times about the decline and fall of Friendster, or blow it up and make a wall-hanging for the boardroom, or force every employee to memorize it, or something equally dramatic. As a VC in the story says, Friendster is an “iconic case of failure,” an epic tale of missed opportunity and failed potential, like a Greek tragedy with Silicon Valley engineers and VCs instead of Oediupus and his mom.

In 2003, Friendster was a social-networking star, and growing quickly. Kleiner Perkins and a host of other top VCs were all over it like white on rice. The company turned down a $30-million buyout offer from Google. Why not? It was going to be huge. Then came the stability and performance issues as it grew — ignored, of course. Then the “help” from miscellaneous CEOs, board members and others, most of which focused on competing with Google, Microsoft and Yahoo. And a long, spiralling trip from superstardom to the bottom of the barrel, as MySpace became everything Friendster could have been.

So who’s to blame? The founder suggests (through a friend) that the VCs screwed everything up. Some of the VCs even appear to agree. The legendary John Doerr of Kleiner Perkins says “We completely failed to execute… everything boiled down to our inability to improve performance.” While the executive team was planning to expand and offer all kinds of new features, the site was so slow as to be almost unuseable, and it continued to pursue a kind of gated-community approach even as MySpace opened itself up to anyone.

This story should be required reading in the Valley, especially now during what may or may not be Bubble 2.0.

Like a lot of people (judging by the links at memeorandum) I read the New York Times story on MySpace with interest, since it and Facebook are probably the poster-children for the whole online “social networking” phenomenon, or whatever you want to call it. Others — such as Clickety-Clack — have focused on the fact that Google and Yahoo aren’t that interested in advertising on MySpace because they don’t see its users as being an attractive market, since they are mostly interested in “socializing not buying.” Apart from that, however, one of the things that interested me most was the tension between the founders of MySpace — Chris DeWolfe and Tom Anderson — and the News Corp./Fox Interactive types who are now in the driver’s seat.

Although the article says that Murdoch has tried “to do nothing to interfere with whatever alchemy attracted so many young people to MySpace in the first place,” there are hints of some tension between the MySpace side and the advertising mogul side of the equation. At one point, Ross Levinsohn, the guy in charge of the News Corp. interactive media arm that now controls MySpace, talks about new ideas for revenue, and DeWolfe flatly contradicts him:

“Mr. Levinsohn, for example, said he saw opportunity in the one million bands that have established profiles on MySpace; he said MySpace could charge bands to promote concerts or to sell their songs directly through the site. In an interview the next day, however, Mr. DeWolfe dismissed the idea [saying]… “We never thought charging bands was a viable business model.”

At another point, Levinsohn talks about his plans to work advertisers into the site by giving them their own pages, in the same way that other MySpace.com users have pages, so that users can add them as “friends” and create linkages that will promote the product or service (Wendy’s has already tried this strategy, and gotten 100,000 MySpace users to add its animated hamburger as a friend). But DeWolfe disagrees with this too:

Yet here is another place that executives at Fox and MySpace don’t see eye to eye. Mr. DeWolfe discounted the idea of people creating profile pages for small businesses. “If it was a really commercial profile — the gas station down the street — no one is going to sign up to be one of their friends,” he said. “There is nothing interesting about it.”

Is this just tension between the guy who started something and the corporate executive who is trying to change it? Probably in part. DeWolfe is also no purist when it comes to advertising, since he got his start with pop-up ads and downloadable ad software similar to Comet Cursor. But it will be interesting to see how the MySpace.com user base takes to an aggressive ad push, if that’s what is coming. And it’s also interesting that the NYT article mentions that DeWolfe got the idea for MySpace from Friendster, the former poster child for social networking — and yet the piece never mentions that Friendster flamed out and was replaced by MySpace virtually overnight.