Plaxo gets hip to VoIP

Internet contacts company adds a calling feature to its contact service. Can it make itself heard over Google, AOL and others?

Elinor Mills Former Staff Writer
Elinor Mills covers Internet security and privacy. She joined CNET News in 2005 after working as a foreign correspondent for Reuters in Portugal and writing for The Industry Standard, the IDG News Service and the Associated Press.
Elinor Mills
4 min read
Plaxo, the company that drove some people nuts with e-mail invitations to its service, is getting on the voice over Internet Protocol bandwagon.

On Tuesday, the Mountain View, Calif., company unveiled plans to move beyond the synchronized and centralized online address book and calendar it's been pushing the last few years and become a communications provider of sorts.

Plaxo's new Click to Call feature lets users make phone calls by clicking on a phone number in their Plaxo address book. A screen pops up asking the caller to confirm the numbers, and when that screen is clicked, the phone will ring. When the caller picks up, the system automatically initiates the call to the other person.

Ben Golub Ben Golub

The calling function, available through a partnership with VoIP provider Jajah, does not require either party to have headphones, microphones or a high-quality broadband connection or extra VoIP software, said Plaxo Chief Executive Ben Golub.

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The first five minutes are free to anywhere in the world. After that, the charge is less than 2 cents a minute in the U.S. and slightly higher for overseas calls, he said.

The move marks Plaxo's first foray into allowing its customers to actually communicate by phone with the people they have listed in the contact management service Plaxo provides. A partnership Plaxo has with AOL lets AIM users initiate chats through the Plaxo address book.

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"Our overall broad mission is to make it easy for people to connect to and stay connected with friends, colleagues and customers," Golub said. "We took the first step when we introduced the smart address book," about four years ago.

Plaxo is entering an already crowded space with giants such as Google, Yahoo, Microsoft and Time Warner's AOL, analysts said.

"It's a market with a lot of entrenched competition," said Michael Gartenberg, an analyst at JupiterResearch. "Increasingly we are seeing more and more integration of peoples' contact data across multiple applications, so it's a question of how long that will remain a distinct advantage for them."

Michael Osterman, principal of messaging research and consulting firm Osterman Research near Seattle, said the calling function is a logical extension of Plaxo's business and agreed that the company faces challenges.

"When you are going against the likes of Google with lots of cash in the bank, it can be a difficult row to hoe," he said. "Everybody wants to get access to the user."

Jokes aside about the barrage of e-mails it once sent to prospective customers, Plaxo has seen its service--a centralized online address book that can be accessed across multiple accounts and on numerous applications, including Microsoft Outlook--become an organizational tool for as many as 12.5 million members. The service lets users automatically update their address books and synchronize with other electronic address books.

Plaxo offers a premium service for just less than $50 a year that allows people to use the service over mobile devices, among other things. It also offers a calendar function and will add more- advanced features following its recent purchase of HipCal, an online calendar provider, said Golub.

The company's membership also got a boost last year with the AOL partnership. "We're getting 30,000 members a day just from working with AIM," he said.

"We want to go from being an island to being the center of gravity for all communications," Golub said. "We're trying to become a needed part of the Internet infrastructure."

That's a tall order for a 42-person company that has yet to turn a profit. "We expect to be cash-flow positive by the end of this year" and "highly profitable next year," Golub said.

Golub added that the company plans more partnerships. But there's one problem: Those prospective partners are already forging ahead with services of their own. AOL has a "talk" button integrated into its instant-messaging client. And it recently launched AIM Phoneline, which lets AIM users use their IM client to talk to people who are using regular phones.

Late last year, Yahoo announced Phone Out Phone In, which lets people make calls to telephones through their Yahoo Instant Messenger client. Yahoo Messenger and MSN Messenger both offer free PC-to-PC calling and the ability to communicate with each others' networks.

Google launched its PC-to-PC call-enabled Google Talk instant-messenger program last August, and eBay's Skype is also a market leader for VoIP.

But Golub said Plaxo has one thing that all the portals, carriers and other service providers need for useful communications services: a giant, virtual Rolodex.

"Voice over IP, social networks, new devices, personalization, triple-play services from carriers all need a smart address book for the network," he said. "Right now, there isn't one."