It was popular, but didn't generate revenues. It's not enough for a website to be popular, you have to figure out how to get people to give you their money.
Failure to scale infrastructure in a cost effective way that matched it's growth curve. Also, Friendster failed to adapt and develop features that resonated with emergent user activity. Within a year or two, other players emerged to eat its lunch.
٭ ...and when I say "die," I mean decay into near total disuse and irrelevance by the end of 2004.