Leading regional payment company, MOL Global, continues to reap the benefits of its US$38 million (RM121.68 million) Friendster acquisition.
While it is believed that earlier this year MOL inked a lucrative deal to license Friendster patents to Facebook, yesterday it signed a strategic partnership with Facebook that will allow Facebook’s fast-growing Southeast Asia members to buy Facebook Credits using MOL’s physical and online payment channels.
According to Tan Sri Vincent Tan, chairman and CEO of Berjaya Corp and a major shareholder of MOL, he has set MOL’s CEO Ganesh Bangah a target of reaching RM1 billion valuation before going for a listing. Ganesh expects to hit the RM1 billion valuation in the next two to three years.
Tan estimates the current valuation of MOL at RM500 million. Speaking at the signing ceremony here yesterday, he said MOL was in talks with a few parties which were keen to take a stake in the company, the largest online payment provider in Southeast Asia.
Ganesh said it was difficult to make a revenue estimation from the deal, pointing to the fact that Zynga, a social games site, was PayPal’s second-biggest customer with estimated revenues in the hundreds of millions of US dollars a year.
Facebook, according to its director of corporate and business development, Vaughan Smith, has 24 games on its site, each of which are played every month by at least 10 million users.
In the online gaming world, while most games are free, gamers will buy virtual currency like Facebook Credit to purchase virtual items, some of which could likely sell for thousands of ringgit.
According to Smith, a key attraction to work with MOL is its extensive physical payment channels in Southeast Asia. “Physical channels are very important to us in this region,” he said, alluding to the fact that credit card penetration was low throughout most of Southeast Asia.
“Personally I have been very impressed with Ganesh and his team and that sentiment is shared by the entire Facebook team. They have grown a very impressive business over the last few years and that is something we respect a lot,” he said.
On the strategic importance of the deal to MOL, Ganesh said: “This continues our momentum to build the largest end-to-end content, distribution and commerce network in Asia.” At the press conference announcing the non-exclusive partnership, both Tan and Ganesh said the purchase of Friendster had been a big boost to MOL’s brand as it had brought them to the attention of large global technology firms.
“A few years ago, Ganesh could not get a response from Facebook when he emailed them but today they email him!” said Tan.
MOL’s wholly-owned subsidiary, MOL AccessPortal, will become a payment provider for Facebook Credits. Facebook members will be able to buy the credits using MOLPoints on both Facebook and MOL’s website.
MOL will get a percentage for every Facebook Credit sold which will be in fixed denominations. Co-branded gift cards for Malaysia and Singapore that can be redeemed for Facebook Credits are also in the works.
Written by Karamjit Singh
This article appeared in The Edge Financial Daily, July 9, 2010.
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