Founded in 2001, Plaxo was one of the early players in the social networking world. But, like many others in the space, the company has become part of the shadow of biggies like Facebook and MySpace.
So what to do? It seems the answer is: sell out. This is according to a report in the New York Times, which indicates that Plaxo has retained an investment banker, Revolution Partners, to test the waters.
Yet, at the same time, the company is trying to find ways to boost things. Plaxo's new strategy is to try to cleverly suck up users from Facebook and MySpace through a system called Pulse.
There is a new feature for the system which has a special script that scans your friends' pages on Facebook. It wasn't easy to pull off because email addresses are in graphical form on Facebook. But with optical character recognition scanning, it's not a problem for Pulse.
No doubt, social networking can be a Darwinist environment.
To fight back, Facebook says that Plaxo's allowing users to violate its "Terms of Use." The website temporarily banned uber blogger Robert Scoble from using the script (Pulse gave some a-list bloggers a look-see at the system). Although, keep in mind that Facebook has its own address-book import feature (which I believe has been important in its user growth).
All in all, it seems like Plaxo is doing what others are doing (which, of course, doesn't make it right). More importantly, it does look like a violation of privacy. Do you want your emails scraped with an optical character recognition scanner?
But if you're trying to sell your company -- one that is not profitable -- Plaxo needs to find ways to ramp up its base of users.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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