Plaxo Problems May Hamper Sale

The basic idea behind Plaxo is to  be the one site for all of your information. The aggregation is meant to be from various sources like your email contacts, your social network information and more. Because it takes data from all of these sources, you should be up-to-date on “everything” in your online (and possible offline) life. Plaxo says it a little better than I do in their “About Plaxo” page:

Plaxo, Inc. keeps people connected by solving the common and frustrating problem of out-of-date contact information. Founded in July 2001, Plaxo provides a free service that securely updates and maintains the information in your address book. Plaxo is the universal digital assistant; available to you wherever and whenever you need it to keep you organized, on top of your life and in touch with those you care about.

This sounds like a fantastic idea, and it is surprising that anyone would not want to use this type of service. Then the bad press started. TechCrunch panned it back in early 2006. There were plenty of similar blogs regarding the “spammy” emails people were getting. Then things got quiet. Disappointingly, it seems like it was the quiet before the storm. The day after they briefed people on offering itself for sale, their new service Plaxo Pulse caused all sorts of problems. First, it looked like Robert Scoble got caught being bad. Then the details started to come out. Scoble was not hacking Facebook. He was trying to import information into Plaxo from Facebook. Well, if he wrote a script to do it, then he violated the terms of service for Facebook. Many sites did not say it outright, but most seemed to doubt he would do this on purpose. Then we find out that he only used Plaxo Pulse, and it was causing the problem. The timing of this is terrible if Plaxo is looking for buyers. The other problem Plaxo has is traffic. According to, Plaxo monthly visitors grew by 47% in the past year. That is a mediocre growth rate for the type of service it is. This is a particularly bad growth rate when compared to their close rival LinkedIn. LinkedIn grew an astounding 485% in the past year. Both sites had approximately the same number of monthly visitors a year ago. We do not even want to compare the number of users for Facebook. They are in a different league.

So, who would want to buy Plaxo? They do not make sense for an old media company as I said Digg would. They do not have the appeal of Facebook, as there just are not enough users. The $100 million price tag quoted by the New York Times seems high given the growth rate, and when Digg is “only” asking for $300 million. A company like Microsoft or Google would make sense, but they both have interests in something already (Facebook and Orkut respectively). I can not think of anyone.

Do you know of a good fit for Plaxo?

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