Friend comes from the Old English word freond, which I think is much cooler. It has the same meaning as friend, but it also happens to be the present participle of the word freogan, which means to love or to favor. It can be traced to the Proto Germanic frijojanan, to love, but that’s as far back as that particular word goes. Also, I absolutely love that the Online Etymology Dictionary lists the creation of friend as a verb to Facebook in 2005.
But that’s not the end of the story. That Old English freond happens to be related to the Old English freo, which means free. It comes from the Proto Germanic frijaz, which is quite similar to the above crazy word frijojanan. Unlike frijojanan though, frijaz can be trace to the Proto Indo European prijos, which means beloved. Beloved like a friend perhaps. So yes, free once was closer to love, which makes a lot more sense for friend. As for why free is like that, there’s only guessing.
We’re still not done. If you take that r out of friend, you basically have the opposite: fiend. That’s true in Old English, too, where the word feond means enemy. It happens to be the present participle of feogan, to hate, coming from the Proto Germanic fijaejan and Proto Indo European pei, to blame or revile. This means that the lack of an r has made these two terms opposites as far back as etymology can trace.
Tony Jebson’s page on the Origins of Old EnglishUniversity of Texas at San Antonio’s page on Proto Indo European language