Today was a momentous day for us at Plaxo as we announced our relationship with AOL. Already, we are starting to get some positive reactions to this announcement.

For the past 3 years, Plaxo has focused on building a useful service that enables individuals to easily connect to the people and information that matter to them. Along the way, we have gathered over 5 million subscribers, and have made technological innovation that bring us close to the goal of enabling people (from wherever they are) connecting with their friends and colleagues (wherever they are) in the manner (e-mail, regular mail, IM, phone, Voice over IP, Text messaging) that is most appropriate.

We are excited about the relationship with AOL for several reasons. Here are a few:

1. The Strength of Our Relationship: While this is not an exclusive relationship, both AOL and Plaxo have committed extensive amounts of time, resources, and energies to make this work. AOL has proven to be a fantastic company to work with through the entire process, and we are very much in synch about the need to provide an integrated and unified communications experience to our users. And...we both believe that our integrated services will be better for most users than either as a standalone. The Plaxo-enabled version of AIM will be the default version provided to the 700K or so people who download AIM every week, as well as the 60M current AIM users and AOL customers as they upgrade over the next several months. Similarly, the AIM enabled version of Plaxo will be the default offered to our new and upgrading members. (Obviously, we respect customer choice, and people can opt-out of the integrated versions if they choose.)
2. What this will mean for Plaxo Customers: Plaxo customers who choose to take advantage of our joint offerings should gain a number of new benefits. First, this will ensure that they can extend their universal address book to work well within AOL clients. Many of our subscribers use Plaxo in association with a work environment (such as Outlook), and use AIM, AIM Mail, or AOL at home, school, or on the road. This should allow them to easily share a universal address book and other PIM information. Furthermore, the integration of AIM presence information within Plaxo means that people will be able to look at the people in their address books (or look at the person who has just sent them an email) and be able to see if they are AIM users, see if they are online or offline, and?with one click, initiate an AIM session. Very cool.
3. What this will mean for the 60M AIM users and AOL customers. If you haven?t played around with the beta version of the newest AIM client, I encourage you to do so. You can already use that client as a way to initiate Instant Messaging, e-mail, text messaging, and Voice over IP calls with your friends, family, and colleagues. With this integration, we?ll be giving the users of these services the critical, up-to-date, accurate, and always synchronized information they need to fully take advantage of these new unified communications features. Plus, we hope that exposure to Plaxo will bring all of the advantages described above to AIM users and AOL members.
4. The Value that Comes from Scale: As a result of our work with AOL, the number of Plaxo subscribers should increase dramatically over the next several months. With as many as 30-60M new members, this should mean that:
   
   
   
   1. Plaxo should become a much more valuable service for everybody. To start with, everyone?s address books should be a lot more linked and a lot more up-to-date as the size of our network increases. Currently, when a new member joins Plaxo, they will find that about 20% of the people in their address book are already Plaxo members (and their entries will therefore have their most up-to-date information.) For the remainder of the people in their address books, people will have to use our Update Request mechanism or similar means to get new information. We estimate that the percentage of linked address entries should go up dramatically and?we hope?the need for update requests will go down dramatically.
   
   
   2. Plaxo?s near-term business model benefits: We?ve had some success already this year generating revenues through subscriptions to our premium services, through our in-context commerce offers (e.g. sending birthday cards), search, and advertising revenues. As the number of users increases, this of course will help us bring in the revenues we need to fund further development and growth, improve our products, pay our engineers, and meet the expectations of our investors.
   
   
   3. Plaxo?s long term business model benefits: Plaxo has always believed that there are a wide range of transactional, enterprise, and network services that we could provide when we had 50M members that we couldn?t provide when we had 5 M members. This should certainly help us on our way.
   
   
   4. Validation of the Work We?ve Done to Date: The fact that a company as well respected as AOL would choose to work with Plaxo on a project of this importance is certainly a testament to the quality of the team of talented developers, marketers, operations, and customer service people at Plaxo. Congrats, team!
   
   
   5. The Opportunity to Work with A Company like AOL: AOL is one of the pioneers of the internet, and has been responsible for bringing tens of millions of people online in a richly rewarding, secure, and high quality environment. We certainly hope to accomplish something similar as the Internet and converged networks move to a new phase of development, and are excited to be working with AOL along the way.
   
   
   
   

Well enough talking. We?ll be going into a beta in early August, and have plenty to do until then!

Ben Golub
CEO
Plaxo, Inc.