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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. Internetnews.com recently spoke with him to discuss the current state of Plaxo, its challenges and its outlook.

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 adoption?

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.

We 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.