Ben Golub, President and CEO, Plaxo

Ben GolubIn a world of multiple e-mail addresses, phone numbers and changing locations, staying in touch isn’t always an easy task. That’s where the Plaxo contact management application comes into play by keeping contacts connected and accurately synchronized.

Plaxo integrates into popular e-mail programs, such as Microsoft’s Outlook and Outlook Express, as well as the open source Mozilla Thunderbird. It also has
a partnership with Yahoo for search and is now a part of AOL’s recently launched AIM Triton instant messaging program.

The company, which is currently venture financed, has the backing of Cisco and has stacked its board of directors with Tim Koogle, former president and CEO of Yahoo, and venture capital superstar Ram Shriram, among others.

For the past year, Ben Golub has been at the helm of Plaxo as its
president and CEO. recently spoke with
him to discuss the current state of Plaxo, its challenges and its

Q: What have been your biggest challenges since joining Plaxo?

Our challenge has been to go from something that people
use occasionally to something that is a more integral part of their daily
computing experience.

There are a lot of dimensions to that, including increasing functionality,
increasing the number of users so the network itself is more valuable and
increasing ease of use. Each of those is a challenge in and of itself, but I
think we’ve made good progress on all of those fronts.

One of the clear challenges for Plaxo was to get better at establishing good
partnerships. We all focused on making sure that
Plaxo wasn’t just a standalone, but could also work well supporting
partners. Perhaps the best example of that is what we’ve done with AOL.

Plaxo is an integral part of the experience for all new AIM
users. We’re seeing at this point multiple new members
joining as the result of our partnership with AOL.

Q: Are you able to qualify or quantify the impact of AIM Triton on Plaxo

It’s still relatively early on. But we certainly expect it to be at least a
three-figure percentage increase and probably more than that. There are
north of 30 million users of AIM and what we’re seeing right now is that a
very significant percentage of people that are downloading AIM are choosing
to become Plaxo members.

Q: How many Plaxo members are there now?

This time last year we were over the 5 million user mark. We’ve seen very
significant growth and we expect to be in the high tens of millions of
active users by the end of this year.

Q: One of the concerns in the past is that people send Plaxo requests
that sometimes end up in spam or junk mail filters. How is Plaxo addressing that problem? Do you have an indication as to what percentage of Plaxo requests are
converted into Plaxo contacts?

We’ve always sort of had a desire to get to the point where people don’t
actually have to send out update requests. When address-book contacts are
already Plaxo members, information is updated automatically
without requiring an update request to be sent out.

At this point, we’re seeing that new people joining are finding on average
that 20 percent of their [contacts] are already Plaxo members. We’re trying to wean people off of sending update requests to everyone
in their address book and instead have them send out more personalized
requests to 10 or 20 people that they know well and with whom they already
have an existing relationship.

As a result we’re seeing people send out
fewer update requests, but they are having a much higher conversion rate
because they are going to people that they know.

Q: There is an upcoming Windows Live feature that looks a lot like Plaxo. Is
that a concern and how is Plaxo going to compete against it?

All of the Microsoft Live announcements validate the concept of software
as a service. The particular announcement that you’re speaking about
speaks to the importance of having a connected address book that really goes
beyond what you might have within the walls of your own enterprise.

think that at this point we have a large and growing network that provides
value to people, and we’ve always tried to make Plaxo interoperable not only
within certain applications but also between applications. People can use
Plaxo to connect their address books, and I think that should serve us in
good stead hopefully working with Microsoft but if not being a viable option
to Microsoft.

Q: What are the barriers to adoption for new Plaxo users? Is pen and paper still the biggest competitor?

When people ask me who our biggest competitor is, I say it’s the little
black book. I think that there is certainly a barrier that we need to get
people over in terms of using electronic means to help manage their personal
information. But once they are over that barrier, we are finding that really
it’s just the normal blocking and tackling of making the product easy to
use, increasing the number of people that use the product and adding more
useful features.

Q: When Plaxo began, it was all free. Now there are all kinds of tie-ins and
premium offers. Do you find that you are getting a reasonable number of free
Plaxo users converting to paid users?

In the past few months we’ve seen a big uptick in the number of users that
have taken advantage of our premium services. The other path to
monetization is things that we like to call “in-context commerce.” So some
action that you might want to take that makes sense with the information
that Plaxo is providing.

The best example of that now is eCards. We know
when birthdays are coming. Probably about a third of the people in a user’s
address book will have input their birth date, and so we’ll send a
reminder and give users the opportunities to send gifts, flowers, chocolates
and now either free cards or premium cards.

Q: Plaxo is currently privately held. Is it Plaxo’s intention to stay
private or is there some kind of exit strategy that you can talk about?

There is nothing really imminent at this point. We’re on a nice path to
profitability. We’re not anticipating doing a new round of financing. We
think that we can become a viable standalone company but obviously all doors
are open.

Q: What are your goals for 2006 and beyond?

Our primary goal in 2006 is to go from something that is used by a small
number of very happy users to something that becomes ubiquitous.
We want people to view Plaxo as the Internet’s address book — the way that
they can stay connected to people.

We’ll continue to drive partnerships,
make it easier for people to integrate their application with Plaxo,
obviously continue to grow the number of users and we expect to become
profitable in 2006.

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