Plaxo And Facebook Merger Rumors False (So Far)
Michael Arrington
49 comments »
We know Plaxo is for sale, presumably looking for north of $100 million and telling people around Silicon Valley that they’ve had an offer for north of $200 million. Revolution Partners, an investment bank, has been pitching them to all the big potential buyers.
There are now more rumors about the acquisition; specifically that Facebook is the buyer. VentureBeat is saying they have a source confirming the deal is “100%” happening. Our sources (and common sense) say its very unlikely any offer has been made, let alone accepted, and that Facebook may be just one of many companies taking a look at Plaxo.
Let’s look at the numbers. Plaxo reportedly did around $5 million in 2006 revenue, doubling that to $10-$12 million in 2007. 2008 projections are $20-$25 million. The company has just 1.8 million worldwide visitors per month (Comscore), less than 2% of Facebook’s 100 million monthly visitors. At current growth rates Facebook is adding around 10 million unique visitors per month. Putting this deal into perspective: Facebook grows a Plaxo every six days or so. And Comscore says 25% of Plaxo visitors are already coming to Facebook anyway.
Plaxo’s users also visit the site infrequently compared to Facebook users. Facebook’s 100 million visitors generate 42 billion or so monthly page views. Plaxo sees just 11 million page views per month, a tiny fraction of that. As an aside, Facebook generates the equivalent of a month’s worth of Plaxo traffic every 10-15 minutes.
Why would Facebook part with the rumored $200 million for a service that is so relatively small?
Crazier deals have been done, but this one isn’t happening (yet). Plaxo is a valuable property. It has a large professional social network and a great new product in Pulse - the sort of anti-Facebook news feed in that it pulls stuff from a variety of social networks instead of just Facebook. But it’s value will be greatest to someone that doesn’t already have those assets. Facebook does.
One would think facebook would be leery of taking on Plaxo’s privacy baggage given the recent beacon boondoggle as well. By the numbers and the PR, doesn’t seem like much of a fit.
Yep I can’t see how this deal would make any sense at all. Why on earth would FB want Plaxo? It could seemingly add very very little to the product offering there. Someone chime in if I’m missing something.
Right. It’s not revenue. If anything, it’s technology.
Both companies are mutual nice fits for their great spamabilities..
Eric - ok, but it seems that Plaxo has assets that would be highly valuable to a different buyer, someone without a social network. Our sources say your story isn’t accurate. But it’s an interesting discussion nonetheless.
Where did the “100 million monthly visitors” to Facebook come from? Facebook’s website says 60 million active users.
Yep - it’ll be interesting to see if this comes out to be true, though even at $100mm, it seems as though this isn’t something that really jives with the FB vision of “building a better web”. The Plaxo technology isn’t seemingly that sophisticated in comparison with what FB could build over a period of a few months.
I would agree with Mike here –> Plaxo could be incredibly valuable for a buyer that wants to start with users and build something around them. Curious to see how it shakes out.
Does anyone know how much cash FB has on hand after the MS and HF funding?
I agree with Eric,
I think the technology is attractive, especially the list segmentation, multiple profile management, synchronization with users’ existing address books (online and off) as well as activity streaming from multiple sources. is it worth 200M? all stock deal perhaps, but these things will quickly push FB into the business user side of the web.
hc
I like the present in facebook, especially the eggs.
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Why do I keep seeing Scoble chuckling in the background? If this deal goes thru then Bobby “The Scraper” should get his palms greased by both parties for arranging the “blind date” heh heh. Talk about strange bedfellows!
Personally, I don’t want to see this happen. I’ve been a Plaxo fan since day one. I would much prefer to see Google buy it and give gmail a real Pulse and contact management muscle.
Pai
“Facebook grows a Plaxo every six days or so.” Haha, that’s good.
The sad part is that it means Facebook probably grows my website every 8 minutes or so.
“Facebook grows a Plaxo every six days or so.” Haha, that’s good.
“The sad part is that it means Facebook probably grows my website every 8 minutes or so”.
haha, mine every second or so!
might as well, they are both laid out the same. My Plaxo network is building so much faster then my Facebook or linkedin networks.
Same dam things as all the others!
Mike,
I used to read TC every day…but as I find myself trying to search out a more authentic source of tech news I don’t seem to land here as often….
Not sure how useful all the Google and FB are taking over the world talk is…
This might be more useful if you could give us some insight into who are ‘all the big potential buyers’…
AND…what is the business case for each ‘big potential buyer’ to want Plaxo.
Have the journalists at TC been over run by gossip mongers?
Perhaps you might want to clarify for your readers what the ‘Crunch’ in TechCrunch now means to you?
BTW…thanks for everything you’ve given us in the past!
Maybe so, but in Microsoft’s heydey, they would buy competitors and then kill their product just so there would be one less competitor. Maybe Zuck is taking a page from the same book.
@Robert McLaws: Plaxo isn’t even close to being a competitor to Facebook.
“Facebook’s 100 million visitors generate 42 billion or so monthly page views” - is that right? seems one heck of a lot of views on a pure average basis?
Certainly not a technology buy [in the sense of msft's earlier buy of webfives.com].. and in that terminology, it’s obviously a community buy, if there’s any sales & purchase eventually..
I dont think that anyone is going to buy Plaxo. Both Facebook and Plaxo are going to continue to have issues with data portability and Plaxo may begin to have issues of relevancy
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Let’s admit it, that there’s simply NO MONEY in what so called the LOOOOOOOOOONG TAIL..
Laugh Out, but still, No Good. They simply add to the tail, no matter how long.
Your title is retarded and doesn’t have anything to do with what you are trying to say. You mention that it is a merger, but than you go on to say that Plaxo is a little ant compared to Facebook. WTF that isn’t a merger. Would you call Googles’ buying of writely a merger or even double click.
OY! If Facebook does by Plaxo I will need to kill my plaxo account and quickly remove all my contacts before facebook gets them!
First the fire Sean for doing coke and now they wanna buy his gig (ex-gig, that is). One spam company buying another. Great. At least plaxo can monetize.
they
>Some things about adelph.us
Tell that to Eric Schmidt, Larry Page, Sergey Brin — who might actually listen. Mightbe. Mightbe not.
i hope this doesn’t happen.
yeah i really hope the outcome isnt bad.
Michael, where’s Facebook’s revenue numbers for comparison?
If what you say is correct for the 2007 figures of Plaxo of say 12M, then it would be safe to say they are earning like 1M a month to 1.8M monthly uniques visits or roughly 56 cents per visit
I heard FB had 100M for 2006, not sure for 2007 but there are reports it was pegged at around 150M vs 100 milion uniques per month which translates to 12.5 million per 100million visits per month OR roughly 12.5 cents per visit
Hmmm. so is Plaxo monetizing 4x the rate of facebook?
Strikes me as good logic if what Ree says is correct and the numbers so show that Plaxo is monetising at 4 x the rate of Facebook
The FB strategy of raising money at the top of the market and using it to buy better performing assets whilst broadening the reach and position with a more serious business user audience sounds like a good one.
i think this merger is not possible
Is this the same source that thought News Corp was going to buy LinkedIn because they were having talks about a tie-in? VentureBeat increasingly resembles a 14-year-old schoolgirl who sees a male and female friend talking together and immediately spreads rumours that they’re going out, not mendaciously but with total conviction. At least TechCrunch isn’t breathlessly passing them on for once.
As for whether there’s a sound reason, well, I find it difficult to see a sound reason for buying anything at 10 times revenue (profit? whassat?) so I can’t comment.
Michael, your comparison makes no sense to me because you only looking at page views and subscriptions. You should also look at the value per user. It’s looks like Plaxo found a way to make more money per user than facebook is doing at the moment.
Nevertheless I don’t see any strategic benefits in this deal, facebook can simply copy the technology from Plaxo. I think that a company like IAC can benefit far more from taking over Plaxo because they can promote Plaxo in there large network of site and increase revenue and subscriptions. Meanwhile facebook should focus on increasing revenue by finding more advertisers.
For all of you wondering about FB’s revenue. Please recall the value of the Google search deal and you will begin to nibble on what 60M unique visitors a mo. translates into insofar revenue is concerned.
Sure Facebook is growing at a scorching pace.
http://tekno-world.blogspot.com
Plaxo had the chance to implement most of the dataportability options some months ago and for whatever reason has chosen not to do so.
I spoke to Joseph about Plaxo becoming a openid provider i.e http://myname.plaxo.com, better microformat support (hcard, xfn, hatom), offline capabilties via google gear and much more.
Sadly although we were in violent agreement none of it actually happened?
Plaxo could have been the open version of FB with its plaxo/pulse (lifestream) combination but now it seems a sale is the best option out but what does $100m actually get you?
If the unions are for fortifying the companies, why not to try it?
I bet MSFT will buy Plaxo…sweep aside the amateurs at Fb.
i love facebook
http://www.vdoob.com/love/facebook
To be honest I have been using Plaxo for over 18 months - 2 years now and I dont agree that they are out right competitors - you surely cant sum up their service just through their visitors and page views. Their value was never as a traditional social network but as a contact management and backup solution. I believe this is the real value behind Plaxo since a lot of my business associates use it and it keeps my address book up to date whenever they change their details - this is invaluable to me since I am also on the move a lot!
If facebook was to have such technology and improve upon it I would see this as being a HUGE asset.. imagine having your phone up to date ALWAYS with your friends latest phone numbers and addresses updated by them? No need to email all your friends to find their latest addresses to send christmas cards.. its kept up to date because they are your friends on facebook. I see facebook doing away with the traditional Outlook Contacts or paper address books with this technology.
My 2 cents..
I put Plaxo in the exact same bucket with Spammers. These people are rotten to the core when it comes to net etiquette. I’m collecting all their spam they have sent me (like 50 so far) and my 2 polite emails asking them to stop.
One of their replies, from an officer of the company, told me that for them to stop spamming me, I had to go to their site, make an account, and opt out.
Their model of stealing and profiting off other people’s contacts has been wrong from the start, and it is still wrong.
@ #32 “I Am Not Posting To Spam My Blog”
I was right about News Corp. trying to buy LinkedIn, and in fact, that story was covered in TechCrunch UK, first. I guess you’re confused because LinkedIn refused to sell, and you thought that meant there was never any offer made, or something?
Tell me what story I’ve actually gotten wrong….
How do you like them apples?
that’s right Eric. Don’t take any shit from our trolls.
Being a paying Plaxo subscriber, I got suspicious when Yahoo started released into beta their “Clean Up Duplicates” functionality in Yahoo Mail.
I thought to myself, I basically pay Plaxo for two things – (1) is to link with my network (which I can get from Facebook or LinkedIn for free) and (2) for sorting out duplicates in my address book for $49.95 a year.
The way things are looking I can just cancel my Plaxo renewal, no need to pay for what is free. To complete the sync loop I then sync my Blackberry 8800 with Yahoo Mail and I’m a one real Happy Bunny!
Now with all this talk of Plaxo putting itself up for sale, maybe there is something going on between Yahoo and Plaxo.
It makes sense since only recently Jerry Yang demo’ed Yahoo 3.0 with talk of wiki thread features for email amongst others new features.
Just me thinking aloud!
Where are they earning so much money from ?
There are only Google Ads (Adsense) on their website…so does this mean that Plaxo earned 12 million from Adsense…
Is this true ? Can anybody tell ?
@Eric & Mike
Well, one of you will be wrong this time !!!!
Mike, forget about EE eating crow, it just might be you….
Happen to agree strongly w/ EE on tech advantages and future expansion oppty’s for FB, but definitely not at those crazy multiples