Napster co-founder Sean Parker launched a new business Tuesday.
Billed as a consumer-oriented tool to help end users "securely update, maintain and access" their contact lists, the free beta version of Plaxo integrates with Microsoft Outlook for Windows.
Here's how it works: A Plaxo user sends plain-text e-mails to friends and colleagues requesting contact information updates. Recipients can reply to the request by updating their info in the template provided or by e-mailing free-form text, which Plaxo parses using natural language processing technology.
The key to Plaxo's success appears to lie in its virus-like nature.
"As more people receive update requests and begin to recognize Plaxo's value," said Parker, "some will be motivated to download the application themselves."
Those who download the software stay in sync with each other automatically through a Plaxo update center that runs behind the scenes, updating users' address books when members change their information.
"We think it's a pretty strong word-of-mouth case," said Parker. "Every time someone downloads the product, they introduce it to hundreds or thousands of others through their contact book. Eventually people will start getting multiple requests from multiple friends, and we believe that at this point they'll consider downloading so they don't have to respond to multiple requests."
The Mountain View, California-based venture raised $1.8 million from Sequoia Capital in February, plus an additional $200,000 from angel investors. Sequoia general partner Mike Moritz sits on Plaxo's board, along with former Yahoo CEO Tim Koogle. The investment is reportedly the first in over a year for Moritz.
"Sequoia invested in Plaxo because like (previous Sequoia investments) Google or PayPal, the product helps solve a real problem for many people in a simple, elegant way," Moritz said in a prepared statement.
As for privacy concerns, Parker maintains the company will not share users' contact database contents with third parties.
"We don't plan to do anything with the data other than make it available in a permission-based way from one user to another," he said. "We're a conduit, and we've asserted no rights to that content."
When asked exactly how the company intends to generate revenue, the decidedly secretive founder would confirm only that Plaxo is not meant to be spyware or adware.
"We think one of the most clever aspects of what we're doing is the business model, but right now we're talking exclusively about the product launch, not about the business model," Parker said.
Doc Searls, a senior editor at Linux Journal, was not convinced.
"If they won't explain how they intend to make money, one can only assume they intend to spend it," Searls said. "The product looks like a new way to hire a company to annoy your friends. It feels like spam. It's annoying, and I don't think there's a viable plan here."
Andre Durand of Digital ID World and identity service network PingID is less skeptical of the company's prospects.
"When a system like this propagates, it's one small step in the direction of controlling permissions to your data," Durand said. "Piggybacking on Outlook is a brilliant way to do that, because it provides relative ubiquity.... At some point they're going to collide, and that's when people will ask, 'Who controls what pieces of what data?'"
Parker says his company is poised to surpass the prospects of similar ventures like Contact.com and Peoplestreet, because Plaxo is asymmetrical -- meaning recipients of update requests don't have to download software for a transaction to occur.
Support for Outlook Express will be released in the coming months, said Rikk Carey, Plaxo vice president of engineering, followed by a "full-featured Web version" and possible support for other platforms including AOL and Lotus Notes.
