AOL Drives Plaxo Growth

AOL may be cutting its ties to part of its business and its workforce, but at least one partner is blossoming thanks to its AOL connection.

Plaxo, an online address book that allows users to keep their contacts
up-to-date, has been growing rapidly since it signed a partnership with AOL
last July.

The Web-based service provider hit the 10 million member mark in March and
has been adding an additional 1 million members per month since.

The company’s growth spurt is partly due to the viral nature of the service
it offers. Each new member is able to invite his or her contacts to join Plaxo, so membership increases feed on themselves.

But according to Plaxo CEO Ben Golub, AOL has been a very important driver
of growth, and there has been “tremendous uptake” of his company’s service
through the partnership with AOL.

He told that close to 50 percent of new AOL
Triton members have signed up for Plaxo.

The basic Plaxo service is free, but the company also offers premium
services that have deeper social-networking features.

“The more members we get from AOL, the more opportunities we get to upsell
them,” said Golub.

AOL has also helped drive Plaxo’s overseas growth.

Over 40 percent of the company’s users live outside the U.S., 18 percent of
whom are in Europe.

And AOL  has helped Plaxo diversify its user base.

While still predominantly used by people in their mid-30s to late
40s, Plaxo has seen growth among both the very young and the very old.

That mirrors AOL’s demographic.

Once known as the training wheels of the Internet, AOL still has a loyal
base of older users who acclimated themselves to the Web thanks to AOL’s
walled garden version of the Internet.

And AOL also appeals to younger users who use its free networking services, such as Instant Messenger.

While AOL is a failing business to many, its users remain a loyal
and attractive base.

The company revealed today that it averages 113 million unique monthly
visitors and averages 153 page views per unique visitor per month.

“Those are some of the most engaged users on the Net in terms of page views
and time spent online,” noted Golub.

Golub said that AOL’s new strategy will drive even more customers his
company’s way.

But it remains to be seen whether Plaxo’s deal with survive the unpredictable forces of the eyeball-driven Internet business that AOL is seeking to become. Or the philosophy of whichever large company (Microsoft anyone?) acquires the AOL unit for itself.

“As AOL puts more emphasis on the audience part of its business and takes
advantage of online trends, that will be a big benefit to us,” said Golub.

Meanwhile, Plaxo is continuing to widen its breadth of social-networking

Founders of HipCal, which Plaxo acquired
earlier this spring, are now working out of Plaxo’s headquarters in Mountain View, Calif.

Plaxo promises to deliver new features revolving around calendar functions
in the fall.

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