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January 2, 2008

Plaxo’s For Sale

Michael Arrington

56 comments »

Plaxo, the Sequoia-backed start that transformed itself from a hated spam monster into a mild mannered and interesting business social network, has started a sale process according to a source. They’ve hired an investment bank, Revolution Partners, who are spearheading the sale effort.

We do not know what price Plaxo is looking for. The company has raised $28.3 million to date over four rounds, including $9 million last February. The company had over 15 million users as of September 2006, and their recent integration into Google Open Social has led to a further growth spike.

There were rumors in mid 2007 that Plaxo was being acquired by European competitor Xing. Those rumors were either inaccurate or the deal was never completed.

I have an email in to Plaxo CEO Ben Golub for comment. If I were him, I wouldn’t respond.

Update: User data from John McCrea, VP Marketing at Plaxo:

For our networked address book service, we’re right around 20 million users, plus another 15 million address book accounts hosted through partnerships.

Increasingly, though, we are focused on Pulse as the key driver of active users (and pageviews), and although we are still in beta (and haven’t yet broadly promoted to the address book user base), we’re seeing good month-over-month growth in all the key indicators. With Pulse, we’re at 1 million unique monthly users, up from 250K at the beginning of November. In terms of page views and time spent on the
site, our per-visit numbers appear to be comparable to Facebook (based on data from Compete.com), even though our demographic is much more like LinkedIn’s (professional, 25-50 y/o).

CrunchBase Information
Plaxo
Information provided by CrunchBase
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This entry was posted on Wednesday, January 2nd, 2008 at 1:28 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Eric Locken

    January 2nd, 2008 at 1:33 pm

    It will be very intersting to see if there are any takers, to see if there is still confidence in the social network model

  2. Kabatology

    January 2nd, 2008 at 1:33 pm

    The ex-spam monster now on sell…. who’s going to get an why?

  3. vhxn.com

    January 2nd, 2008 at 1:33 pm

    Google havent any interest to buy this website :mrgreen:

  4. KillerStartups.com

    January 2nd, 2008 at 1:36 pm

    Interesting to see how a site that started out clearly as spammer might bet $100+ million.

  5. David Hersh

    January 2nd, 2008 at 1:50 pm

    I go back and forth on Plaxo. While I really love the idea of plaxo providing me with an auto-updating contact list that always stays up to date and tools to keep everything in sync, I just bailed on them because I ran into too many sync problems and kept getting garbage in my address book from people who don’t maintain current info on plaxo.

    I also think the Pulse idea is interesting, but I’m not sure how well it fits into a mostly business oriented site. The folks from plaxo of course claim that this isn’t the case, but we all know it is. I think its the rare person who likes to share their personal content with their business network. I’m not that person and I suspect that most people aren’t either.

  6. Jonathan Dingman

    January 2nd, 2008 at 1:53 pm

    I think we could have seen this coming a mile away.

    That’s largely the reason I never got involved with Plaxo.

    I just never felt it was a good enough service to warrant my time and energy.

  7. Paul

    January 2nd, 2008 at 1:57 pm

    Interesting to see these user growth figures. They don’t jibe at all with a near full stop in Plaxo update requests coming from friends and colleagues.

    Crap - could it be that Plaxo now rules the world, but all my friends who used to use Plaxo no longer care about me?

  8. Will

    January 2nd, 2008 at 1:57 pm

    It’s all very well having XX million registered users but how many of those are still actively using the service? I’m certainly not.

    Also, does anyone have any idea of what sort of revenue model they’re using/planning to use?

  9. sage

    January 2nd, 2008 at 1:58 pm

    #4, where do you get the $100+ million price tag?

  10. Mike Calimbas

    January 2nd, 2008 at 2:23 pm

    I thought about getting on Plaxo about a week ago… After all, we’re all 2.0/Social Network/New Media addicts right? However, while I am at ease putting my info out there for all to see, I’m extremely apprehensive about putting the information of my contacts out there for everyone to see. I’d much rather leave that kind of sensitive info to something like Google Docs….

  11. drew olanoff

    January 2nd, 2008 at 2:36 pm

    Nobody knows what the heck it is. I get Plaxo invites all of the time, never know why, and I finally log in to see yet another social network. If they can get anything for it, they deserve an award.

  12. paisano

    January 2nd, 2008 at 2:40 pm

    I’ve used Plaxo ever since they first launched and have always liked their service and performance. The Pulse feature was a stroke of genius as everyone and their mother is trying to be THE ultimate social networking aggregator! I’ve always thought Microsoft would buy them since Plaxo has always worked perfectly with Outlook. At the very least I thought M$ would steal..er..um…borrow the auto-sync functions.

    Now that the news has leaked that Google is headed down the same path that Plaxo has travelled with their GMail address book and Google Profiles, Plaxo is smart to make this move at this time before their bubble bursts.

    Personally, I would hate to lose Plaxo. It is one of my must-have services!
    I am hoping Google can emulate their model or that whomever buys Plaxo continues what they started.

    Paisano

  13. Alaska Miller

    January 2nd, 2008 at 2:47 pm

    asking price is 250 mil

  14. Ericson Smith

    January 2nd, 2008 at 3:08 pm

    See, I don’t get it. Or maybe I’m just plain silly.

    We’ve (http://www.funadvice.com) got a ton more traffic than those guys without the investment. Are they really saying that $29 Million buys just less than 1 million uniques per month?

    How many developers is that? What do they spend that money on? What kind of revenue do they get for that? Its got to be hookers and blow. Shame on you Mike for encouraging these kind of sites and by extension the bubble.

    Hilarious!!!

  15. Local SEO Guide

    January 2nd, 2008 at 3:15 pm

    I have noticed a big increase in Plaxo requests since the Pulse thing launched. I still don’t really use it but my network on it is growing. The problem is it’s already the same network i have on Facebook and LinkedIn so I am not sure why I need to use Plaxo.

  16. Kid Croesus

    January 2nd, 2008 at 3:26 pm

    Plaxo saved my life when I lost all my contacts by auto backing them up. So I am a fan. But I still dont think they have a revenue model.

  17. Ericson Smith

    January 2nd, 2008 at 3:48 pm

    Looking at the site, I can tell you that there is no revenue model besides Google Adsense or other minimal advertising.

  18. EH

    January 2nd, 2008 at 3:58 pm

    Wait, so there are people who would say there’s a “Plaxo bubble?” I’m not so sure about that, it seems to me they’ve been Sisyphean since their spamming problems.

  19. JTD

    January 2nd, 2008 at 4:17 pm

    Anyone know the number of outstanding shares?

  20. Alex

    January 2nd, 2008 at 4:19 pm

    Two things:

    Arrington said…”I have an email in to Plaxo CEO Ben Golub for comment. If I were him, I wouldn’t respond.”

    another classic line, Mike. That a boy!

    I’m one of those guys over 30 years of age that finds sites like Facebook just plain silly. On the other hand I got an invite from Pulse via a friend last week and checked it out. I found it to be very nicely done. Not sure I need another “professional” site since I’m using LinkedIn. But, nicely done Plaxo team.

    Another 10x return for Sequoia here. Boy, they are good, eh!!!!!

  21. Vasily Klimko

    January 2nd, 2008 at 4:25 pm

    Strange, from March till September their member base grew 50% but it doesnt look like it had much effect on their traffic.

  22. Jon

    January 2nd, 2008 at 4:28 pm

    So far Sequoia has a heck of a lot of good luck with startups, I am unsure if that is because of the number of startups they invest in knowing only 10% will amount to anything or if they are just so damn lucky… but I would invest in Sequoia before I would in Plaxo.

    Jon

  23. Steel

    January 2nd, 2008 at 4:53 pm

    Th good ole boys network in SV is huge. Every back gets scratched and one hand always washes the other. They will be able to dump, errrr I mean sell this to some sucker.err..I mean someone will buy it.

    What a waste of $$$

  24. Technicle

    January 2nd, 2008 at 5:30 pm

    Obvious $ value: between ${twitter} and ${digg}

  25. Dominick Triola

    January 2nd, 2008 at 5:33 pm

    I have used Plaxo for quite some time. I hope any merger made will only result in improving their services. Eventually theu will have to make some serious changes to keep user interest.

  26. Mike

    January 2nd, 2008 at 5:44 pm

    After an enforced move to Vista and the fact that Plaxo don’t support Microsoft’s wonderful *cough* new operating system, I’ve not used Plaxo for several months and, to be honest, I’ve not really missed it.

  27. David Scott Lewis

    January 2nd, 2008 at 5:52 pm

    First, it’s interesting to note that the discourse level for this post is a lot more civilized than the norm on TC. Perhaps this says something about the mature (adults) vs. immature (teenager … or acting like teenager) segments reading TC. (Plaxo is an adults-only subject.)

    Second, not sure what Plaxo could get (in $$$). Something with Spoke may make sense, although I doubt Spoke could afford to buy Plaxo. (That’s why God created private equity firms.) Not sure. It’s not easy to see where Plaxo plays. Of course, everyone will think of LinkedIn or Xing, but are they really a match?

    It’s quite possible that Plaxo offers too little. However, they could be sold at a fire sale price. Even if it’s just 1 million relatively frequent users, this has some value *if* their users are willing to convert to a different system.

    I’d be interested in knowing how much overlap there is between Plaxo, Spoke, LinkedIn and Xing … and especially between Plaxo and LinkedIn. This could make Plaxo valuable to Xing, with Xing using Plaxo for U.S. market expansion against LinkedIn.

    Also, is there a dark horse play, like Ning or GoingOn or a semweb player? (Hey, Mike, you should check out what’s going on at GoingOn. But I won’t say anything; I’m loyal to silly old Tony.)

  28. Drew Loika

    January 2nd, 2008 at 5:59 pm

    Speaking from an end-users perspective I’ve been EXTREMELY pleased with Plaxo providing a unified web interface to the only full-featured PIM app available. Yeah, I mean Outlook. I don’t like it either but there just isn’t a better alternative out there that fits my needs. Plaxo’s ability to sync with other services and further make Outlook my information hub is more icing on the cake, and I see Pulse as a great idea with a lot of potential. Forget about checking yet another account at the social networking site of the year, let Pulse aggregate everything in a calm and useful manner. I fervently hope that Plaxo continues to grow and that their quality services continue to improve.

  29. John McCrea

    January 2nd, 2008 at 6:01 pm

    While I make it a habit of *not* commenting on M&A rumors, I thought it appropriate to wade in for a moment to offer up some links that might explain a bit better where Plaxo fits into the landscape, given that the company is in the midst of a transition from “networked address book” to next-generation social network, embracing the core ideas of “open social”…

    The “Who You Know” Space:
    http://therealmccrea.wordpress.....5-billion/

    How Facebook is a Testbed for the Emerging “Social Web”:
    http://therealmccrea.wordpress.....-for-2008/

    How Networked Address Books Build Large, Rich Social Graphs:
    http://therealmccrea.wordpress.....ial-graph/

    John McCrea
    VP of Marketing
    Plaxo

  30. VitaminCM

    January 2nd, 2008 at 6:22 pm

    Google anybody? They buy everything else.

    Plaxo is actually pretty useful now that they’ve stopped all of the that spam garbage.

  31. Technicle

    January 2nd, 2008 at 6:46 pm

    Why need Google.. just get Cisco pick up the whole thing, for their previous investment in Plaxo.. much like AOL picking up XDrive a few years back…

  32. John Doe

    January 2nd, 2008 at 6:57 pm

    Plaxo’s primary business model was to aggregate user’s address information, and when a user changed addresses, they would sell that information to businesses. Have they done or announced a single deal to sell access to their user’s information?

    I agree that a connected universal address book is a valuable service, but the fact that Plaxo’s is selling out is a failure of their business model.

  33. Mark Zawacki

    January 2nd, 2008 at 6:59 pm

    Plaxo is a feature, not a company.

  34. Alexandre Loureiro Solleiro

    January 2nd, 2008 at 7:25 pm

    Most commenters here don’t seem to be aware that Plaxo has been very active in open standards efforts for the past year or so.
    Their push (with Pulse) into social networks has brought them broad acceptance in the web tech scene. And if their subscription numbers have flown so high is certainly because of this new found respect.
    As the post outlines, they used to be seen as spammers and their marketing VP says they haven’t pushed the new features to the whole user base yet.

    Their offering has always been very promising but has always had flaws. Their premium service, with good features such as de-duplication and strange ones such as e-cards, is too expensive (US$60/year). Their technology is sometimes buggy (calendars are a real mess!) and their UI has a lot of room for improvement.

    To me, the possibility that they’ve put themselves up for sale comes as a shock: it’s a whole lot of really important data their users have entrusted them. And now, just as things were getting interesting, that we actually wanted to see more from them, they pull this off?

    I’m waiting for real facts, but find the idea rather… disgusting. Hoping this is all fake.

  35. Alexandre Loureiro Solleiro

    January 2nd, 2008 at 7:47 pm

    Well, here’s the answer : http://blog.plaxo.com/archives.....w_a_1.html

    The Bill of Rights. Suppose we’d thank you Mike, if all this is true. :)

  36. marzipan from toledo

    January 2nd, 2008 at 7:55 pm

    If there are no takes, LinkedIn and Plaxo should merge. Before Pulse I thought that should be what happens since it would be a good fit. Post Pulse they might want too much $ for it to happen but it would still be complimentary.

    Not worth $250M though, that’s ridiculous. Are they even profitable? Anybody, anybody ?

  37. dave mcclure

    January 2nd, 2008 at 8:12 pm

    LinkedIn-Plaxo deal is unlikely…. Plaxo is worth a lot more to other [bigger | older | dumber] companies than LinkedIn.

    whether or not theyre worth north of $250M i dunno… guessing the post-money on the last round is north of $75M (altho might have been a flat or down round, anyone know? 3rd & 4th rounds looked like corp-mezz rounds, so maybe not)

    still with ~20m users + more indirect thru partners, there is value there somewhere. depends on whether new Pulse strategy works if modest vs larger value. otherwise, guessing latent usage among those 20m, perhaps more like single digit M active base.

    got to give them credit for sticking it out & continuing to innovate tho.

  38. Mark Tiger

    January 2nd, 2008 at 9:41 pm

    i heard eBay is looking to buy Plaxo to make investors whole and give the founders some sort of earn out. PayPal wants the Plaxo data.

  39. TravelGuy

    January 2nd, 2008 at 10:02 pm

    who would want to buy a business which never gained trust among netizens

  40. dave mcclure

    January 2nd, 2008 at 10:32 pm

    @marktiger: huh? sorry i don’t get that one.

    PayPal has 150M+ accounts (ok, & we know that’s inflated slightly for 1-time usage, but ditto for Plaxo 20M+); why do they need another 10-20, probably with some overlap already?

    i might understand why eBay corp would want a email / social networking asset, except they already have Skype IM data. if eBay really wants some synergy, they should acquire / private-label an email hosting provider & offer it to eBay users free in exchange for spam/fraud reduction (which is a big problem, owning 1 or both ends of buyer-seller email would help improve). altho note that probably works better in reverse with MSFT acquiring EBAY, altho that deal’s been rumored forever. still makes sense tho, imho.

    maybe i’m missing something here — what’s the logic behind PayPal interest in Plaxo data?

  41. will

    January 2nd, 2008 at 10:50 pm

    Dave, you hit the nail on the head on the email thing. eBay should have been doing that a long time ago . . . . Im + Email + AntiPhising = google w/o search. (ok, so google w/o search is not so interesting :) )

  42. Paul Tocatlian

    January 3rd, 2008 at 2:37 am

    Plaxo “jumped the shark” a long time ago (right around the time they start supporting AOL logins). I find LinkedIn to be a better service. There is no need for LinkedIn to acquire Plaxo. They simply need to add a couple of Plaxo’s more useful features… and voila.

  43. Rex

    January 3rd, 2008 at 2:38 am

    Plaxo is not proftable. How can they? Asking $250m and more is riddiculous - its a great little tool - but with NO revenue model. Who should buy it? LinkedIn? I hear they are on the selling side as well. Xing? Not enough cash, not enough interrest. So Microsoft? Wel, they could integrate a similar service inot Outlook with their own programmers. Same for Google.

    Sorry, Plaxo - the only value you got is the private data of your users. Thats why I just deleted my account.

    r*

  44. dave mcclure

    January 3rd, 2008 at 3:54 am

    @will: yeah, email-hosting-for-fraud-reduction was a personal favorite… a few of us at PayPal proposed it as an internal skunkworks project back in ‘04, but didn’t get any traction up the food chain. then again they always had a pretty full menu of options over there.

    (and for the record i don’t Skype was a bad move, but probably more synergy with PayPal than for eBay proper. again, at least they were trying to find a few levers.)

  45. micfo.com

    January 3rd, 2008 at 4:09 am

    It has good domain name too, I hope it will fetch good price.

  46. jonas

    January 3rd, 2008 at 6:40 am

    A $100M valuation on exit represents essentially a failed investment. This company has been in business for five years now, and has probably burned down $100M in that period. It looks like they are running for the exits.

  47. Andrey Golub

    January 3rd, 2008 at 10:51 am

    Hi Michael,

    it’s a nice posting and it has gathered lots of people interested in the fate of Plaxo… so I couldn’t also keep me away from commenting here it ‘coz of the two strong reasons-

    a. the name of Plaxo CEO’s sound like a honey for my eyes- I am also Golub :)
    b. you said Plaxo is a competitor of Xing. :)

    So about the name- it’s everything clear I suppose. That was just another reason for me to follow Plaxo since the very beginning when it was still really a spamming tool (and I used it exactly to contact the people I couldn’t contact in any other way :lol:). I am Premium user of Plaxo for the years and I really love it as the Address-Book. as my Network-based very reliable and useful Address-Book. and everybody were happy until the Address-Book hasn’t decided to become Social Network ;)

    now about Xing. I think it’s known for everyone here that Xing has recently acquired Neurona, and even before eConozco. Those were useful to Xing to become larger and always more powerful. In EU and not only (Spanish Networks have some great popularity in the Latin America). In EU as I believe everybody know, the Networks that claim themselves the competitors of Xing are Viadeo first of all and Ecademy. but it’s clear that Xing is much more powerful.
    Xing is a European LinkedIn as I see it (being myself co-founder and VP of the first in the world Official LinkedIn Supporter Club in Italy). So here who will buy who- it could happen that Xing will eat now Viadeo, or LinkedIn will buy them all :)… Or who knows, as the rumors were telling LinkedIn will be put together with MySpace under the roof of News Corp… we’ll see it soon, maybe already in 2008!

    OK, those are the giants of Professional/ Business Networking. But what’s the relations of Plaxo with Business Networking? hm……….

    I think the project that could be compared with Plaxo as it is now, is probably Spock- the People Search Engine 2.0.
    What’s the reasoning of the people that will probably buy Plaxo?
    Traffic generated by the web site? So here Plaxo and Spock are already on a very similar position- have a look at Alexa’s picture: http://tinyurl.com/2kg2xl
    although Plaxo is a 5 years “start-up” and Spock has only few month of life!

    what else? The prospects? It depends on the ideas and ambitions under the project!

    So those two projects are the right pair to compare I think AT THE MOMENT, although the initial ideas of these two projects were very opposite- Plaxo have grown from a Personal/ Private Address-Book to a Social Network behind it, and Spock arrives from another side- it’s goal is firstly to become a Global Who’s Who + community (2.0) for the whole Web World, and then to apply the personal networking features around my profile. And to be able making this- the concept of Trust there was since the very beginning on Spock. And the concept of Plaxo, I think it has remained the same as it was in the beginning- just connect to everyone and be happy… boh!

    have a look- on Plaxo what it was there? It was MY PERSONAL Address-Book, and one day I see that my PERSONAL contacts have started living their own social life… sincerely that made me crazy in the beginning… and lots of another Bloggers were writing about that Plaxo is crazy to have started from an Address-Book and to go Global. a strange way, I think it’s a wrong way and the idea of 2007 that every good project (as a GREAT Address-Book, Plaxo) must “grow” to a Social Network- I wouldn’t agree it should work for everyone!

    I think it’s a very risky and strange idea. So for myself I decided to not participate in the Social Life of my Address-Book :). also because I am used to more classical professional networking tools, such as LinkedIn and Xing- those are the great leaders both and have studied a lot from my point of view the philosophy of BUSINESS/ PROFESSIONAL Networking.

    The same is true about Facebook and MySpace- those are great Networks oriented to Poke-my-friends and Content-is-everything, and those are greatly optimized for that.

    And what’s about Plaxo?! An Address-Book that has started living its own Social Life? well, maybe somebody is happy about that, those people that are gonna pay those mega-millions to buy it have some personal reasoning I am sure. But I sincerely think that Plaxo is gonna sell itself ASAP, since if it’s not sold, the people will loose their interest to it, having seen what’s going on around in every direction- that of LinkedIn/Xing for Business, the one of Spock for Global Who’s Who, and Facebook- the best Social tool ever for me :)

    after all said, I invite all you who think that the Web should be Global, should be 2.0 and there should be a way to manage IN ONE PLACE our Network Identity- have a look at Spock, http://www.spock.com

    btw, you’ll find me there and we could network as a trusted buddies :)-
    http://www.spock.com/Andrey-Golub

  48. Matt M.

    January 3rd, 2008 at 12:46 pm

    PE Hub is saying that Revolution wasn’t hired, and that Plaxo got a $200 million unsolicited offer: http://www.pehub.com/wordpress/?p=1873

    Doesn’t say who the offer came from.

  49. Andrey Golub

    January 3rd, 2008 at 2:38 pm

    WoW! that’s a very good news, Matt.

    I am really happy for the Plaxo guys as I already explained above why do I think those should sell the things ASAP…
    and it’s also nice to see that the 2008 is starting with such a strong market shake! So good luck to the followers ;)

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