cyberspacial musings
bits about the real and virtual worlds

13 Nov

Napster Co-Founder’s New Company

Take a look at this article on CNet. Sean Parker, one of the founders of Napster, started a company called Plaxo to help people keep their Outlook contacts up to date. I’ve been sent a couple of contact updates already by friends using products similar to Plaxo. I’m fascinated by the fact that they got $2M from Sequoia. How do you think they intend to make money on this?

"Parker's company is backed in large part by a $2 million round of venture funding last February, led by Sequoia Capital. The product will go live Tuesday and will be distributed freely. He declined to discuss the company's potential plans to generate revenue, but did say Plaxo would not sell or otherwise use any member's contact information without permission."

This is a pretty interesting idea, already done by at least two other companies. Given the fact that they don’t intend to sell contact information without permission, my guess would be that they will use a bait and switch. The service is free for now. Once they have your contacts, they will ask you to pay for privacy or get your agreement to sell your contacts if you choose to keep the service free. If this is really the case, then essentially you would be asked for your permission to sell information about your clients, friends, relatives, whatever that you keep in your contact list. So technically you don’t have to rat out on your own information, just everyone you know.

Let me be the first to state that if Plaxo, GoodContacts, or other companies do this, I think that they deserve scorn like never before seen. Many people now go to some effort to keep their names off of lists by clicking on the checkboxes to prevent it. How would you feel if someone else gave a company permission to read information about you that they kept? This would seem be in violation of some of the new privacy regulations that have been put in place recently. The person who gave Plaxo or GoodContacts would have to get your agreement to give them your contact information.

Any bets that they won’t be doing that? Anyone have other thoughts on where they will make money if not from this?

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