A few folks are talking about the Plaxo story in Wired. Specifically, this part:

When asked exactly how the company intends to generate revenue, the decidedly secretive founder would confirm only that Plaxo is not meant to be spyware or adware.
"We think one of the most clever aspects of what we're doing is the business model, but right now we're talking exclusively about the product launch, not about the business model," Parker said.

Heh. I visited Plaxo to do some consulting. We just focused on the technical stuff I was there to talk about. But over lunch, I asked the "how will you make money" question. I got similarly evasive answers.

I remember telling some folks about that. My thinking at the time was that these people are:

  1. Stupid
  2. Crazy
  3. Hiding Something

I opted for #3. Why? Because I knew they managed to get some cash out of Sequioa. And Mike Moritz is no idiot.

Posted by jzawodn at November 12, 2002 12:26 PM

Reader Comments
# pb said:

I'm with Doc. This is not a big idea no matter what secret business plan they have. If there is actually something here, Microsoft could and would copy it in a second and have it distributed to every Outlook user in a matter of months if not weeks. But that assumes that there is a problem here that Plaxo is solving, which I don't see. It reminds me of Backflip (nee itixs.com) which has turned out to be a joke.

I'm a Moritz fan (investor in my company) but don't forget etoys, planetrx and webvan.

on November 12, 2002 03:10 PM
# Mathieu said:

wasn't there some other company doing exactly that a few years ago? Of course you won't be able to find them using google since they're dead...

on November 12, 2002 03:20 PM
# Moose said:
on November 12, 2002 03:30 PM
# Michael J. Radwin said:

I remember using a web-based service called PlanetAll that did online address books. It was pretty advanced for 1997. Not quite the same thing as Plaxo, but definitely the same idea. It eventually got bought by Amazon.com (for no apparent reason).

They had an inferior competitor called sixdegrees. I can't say I'm sorry that one went out of business. I never liked it.

Plaxo sounds like an antacid.

on November 12, 2002 03:56 PM
# jim mcmurry said:

I agree - they are hiding something - in the open...

Think of all the "contacts" that you are uploading to their server, that they verify on your behalf....and somehow market products to...or maybe sell research data into how many email address get changed and how often (just a random thought)

There is no such thing as a free lunch - even at Yahoo! :) That free email account you have sure does have lots of advertisements around it on the page.....

As for if this is useful, sort of....the real useful one would be to create an add-in (no server component) that would update my outlook calendar autmatically with verified people (ie - my wife who sits in my home office 4 feet away from me...we cant share an outlook calendar without Exchange Server......)


on November 12, 2002 08:00 PM
# Rich Persaud said:

A biz model is on the About page, "Every year, 37 million people and 2.4 million U.S.-based businesses move.

Evidence of a market comes from presence of a competitor, a cluster of ... media companies, including Knight Ridder:

Server-side CRM vendor used by Plaxo?

Famous customer of CRM solution?

Geneaology of CRM solution?

That concludes today's exercise in entrepreneur topology, brought to you by the letters Y, G and A.

on November 12, 2002 09:03 PM
# Colin Sampaleanu said:

I would take the whole 'viral marketing' thing with a grain of salt. One of our portfolio companies, Infotriever,
has been doing essentially the same thing as Plaxo (as far as I can tell) for a couple of years now, and let me tell, you, the viral thing only goes so far. At the end of the day, people are fairly leery about installing something on their system based on an email, and changing the way they work.


on November 13, 2002 07:11 AM
# john said:

You know what's interesting? If I take the time to update my own contacts I can sync them across my iPod, iBooks, iMac, and PowerMac at work...


all for free, and I don't have to worry about someone else geting the data, except maliciously, as Apple isn't going to use it, and I know that for a fact...

no idea what Plaxo will do with my data...

on November 13, 2002 11:37 AM
# selly said:

1. Mike Moritz is no idiot. These guys have a definite business model in mind.
2. Regardless of the business model, keeping people in contact with one another is a powerful and useful thing. Shit, after the dot-bomb, I lost contact with probably 150-200 people within 5-6 months. And I sure as hell wasn't going through my contact list and trying to contact people to see how they were doing/what their "yahoo" or "hotmail" or "rocketmail" address was so that after they got laid off we could stay in touch.
I think it's a great idea--and so long as it remains transparent and they are open about their privacy issues, I don't have a problem with it.

on November 14, 2002 04:12 AM
# Stephen Walker said:

Our security team did some research into the Plaxo utility and published an article "Patterns Emerging". What you will find is that Plaxo retrieves more than e-mail addresses, in particular profile passwords. Plaxo immediately responded claiming that they only prompt for Profile passwords. This statement is not true. Not once were we prompted for our profile password and yet the Plaxo utility found its way into our designated address book. This in addition to the quote from co-founder Sean "Napster" Parker - "Every time someone downloads the product, they introduce it to hundreds or thousands of others through their contact book. Eventually people will start getting multiple requests from multiple friends, and we believe that at this point they'll consider downloading so they don't have to respond to multiple requests" shows that their motives are at least questionable. This take the "MCI Friends and Family" concept (which I hated) to a whole new level.

on November 17, 2002 06:28 AM
# Cicero said:

Plaxo delenda est

on December 30, 2002 01:10 PM
# rikk said:

1. the prev posting is completely false -- plaxo is not stealing anyone's password. these idiots found a few internal function calls and then wrote a nutty article. a few weeks later they lost their URL (check the link) and faded away. we even offered to fly them to our offices to walk through the source and prove to them they were wacked (there mom wouldn't let them come) ;)

2. jeremy: gee, didn't we PAY you enough? the next time you take money from someone, make sure to mention that you might post public rumors speculating about them -- it might impact your business... the other choice is to take a course on ethics at a nearly community college.

3. in terms of plaxo's business model: we would be complete idiots and failures if we were to try anything nefarious with this service. do you really think that Mike and Tim would want to be involved in something so blatantly idiotic? we plan to roll out some business-oriented revenue products later this year -- nothing mysterious or devious. we think that the free consumer business is a nice way to generate interest and value for business customers, WITHOUT breaching anyone's personal info or privacy...

on September 9, 2003 08:59 PM
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