Plaxo now cash flow positive as it morphs into social network. Is a sale next?

John Shinal · January 7, 2008 · Short URL:

Plaxo has come a long way since the days when it was known most widely for the irritating emails it automatically sent to all the people on the contact list of Plaxo users who updated their information.  

While some people on the receiving end of those spam messages have memories like elephants, millions more have forgiven the company and have in fact embraced it as an online address-book manager.

As CEO Ben Golub tells in this interview, the service has 20 million users, not counting the referrals that come from partners like Comcast and AOL. 

In November, Plaxo threw its hat into the social networking ring by launching a site, called Pulse, that has many of the same types of features as Facebook, and by signing up as a charter partner of Google's Open Social platform, which right now looks like the biggest threat to Facebook's growth plans. Read our earlier take on that looming battle here.

"Open always seems to win," Golub says, using Prodigy as an example of the roadkill among Internet services that chose the proprietary path. 


But has Plaxo pushed the privacy envelope too far once again, as Michael Arrington of TechCrunch reported this past week?

Plaxo co-founder and VP of products Todd Masonis told in a phone interview today that the company "is working on contact importers" that could be used to interface with and get user data automatically from a number of social networking platforms, including Facebook.

The technology, which captures data from Facebook users -- and the friends on their social network -- got well-known blogger Robert Scoble temporarily booted off of Facebook for violating its terms of use after he used a test version that Plaxo had given him.

"The reality is much more complicated than what's been reported by the blogs," Masonis told us. "We weren't ready to talk to Facebook because it's still an alpha version," he said. Plaxo is working on a number of add-on features to Pulse that it plans to roll out over the next few months.

Masonis said he couldn't comment on a NYTimes report that said Plaxo had hired Revolution Partners to explore a possible sales. "It's all just rumors," Masonis said. "I can't comment beyond that."

The possibility of a sale aside, Plaxo needs to be very sensitive to privacy concerns, given their history. While consumers have shown that they will willingly share large amounts of data with the big search engines and with sites like Facebook, they like to maintain control over who sees what. 

In this video interview, shot in November, Golub was diplomatic in his comments about Facebook. "We're open to partnering with everybody...they've chosen to take a particular path," he says. To see our previous coverage of Facebook and the privacy issue, click here or here

Plaxo is hoping that Pulse develops into a destination site that it can sell ads on, thus adding a third revenue stream. It makes most of its money either from selling premium service upgrades to its regular users and from licensing deals with partners like AOL and Comcast.

After several minutes of discussing the merits of open systems, Golub declined to give specific numbers when asked about Plaxo's revenue.  But then he hinted that the company had achieved an important milestone when he said that Plaxo has "more revenue coming in than expenses going out."

When asked whether that was another way of saying that the company is cash-flow positive, Golub confirmed that it was. To see an earlier piece of this interview, which we ran last month on, click here

To see an earlier interview I had with Masonis, when he shared advice for entrepreneurs, click here.

Finally, to see the Plaxo pitch, that's here

Support VatorNews by Donating

Read more from our "Interviews" series

More episodes