Social network site Plaxo considers sale: reports
SAN FRANCISCO (Reuters) - Plaxo, a site that helps users keep their friends' contact information up to date, is considering a sale of the company for as much as $200 million, media reports said on Thursday.
Plaxo is seeking as much as $100 million and has hired Revolution Partners to advise it on a deal, the New York Times reported, citing people briefed on the offering.
Private Equity Hub, a blog edited by Thomson Financial editor-at-large Daniel Primack, said Plaxo was considering an unsolicited offer of about $200 million, but had not retained any bank to advise it.
Officials from Plaxo and Revolution could not be reached for comment.
Fast-growing social networks like privately held Facebook and LinkedIn might be interested in acquiring Plaxo despite its "flat growth" in 2006 to 2007, said Michael Osterman, head of messaging research and consulting firm Osterman Research.
"It might make sense for a consumer-oriented social network (like Facebook) to acquire a business-oriented social network" like Plaxo, he said.
Osterman said he expects more social networking sites to acquire each other over the next 18 months as these Web sites seek to expand ways in which users can stay connected to friends, family and business contacts.
Microsoft Corp took a small stake in Facebook for $240 million last year, and could also be a potential suitor for Plaxo, according to Osterman. LinkedIn has been the subject of buyout speculation, including reports it was at one point a target for News Corp..
Emily Riley, an analyst at Jupiter Research, said a sale would make sense for a "mid-tier" social network like Plaxo because it is difficult to survive independently unless without unique features or loyal customers.
Plaxo has raised over $20 million in venture capital funding to date from backers including Sequoia Capital, Globespan Capital Partners, Cisco Systems and DAG Ventures.
The company helps users synchronize address books and calendar data. When a friend changes their phone number or other contact details, the site automatically updates that information in a user's address book.
Plaxo programs also work in conjunction with popular e-mail and messaging systems, such as Microsoft Outlook e-mail and AOL's instant messaging.
Plaxo said in mid-2007 that it had signed up more than 15 million users, although the number of currently active users is unknown.
(Reporting by Anupreeta Das and Ritsuko Ando, editing by Phil Berlowitz)
