Is Facebook Buying Plaxo?

Rumors abound about Facebook potentially purchasing Plaxo for $100 million. Eric Eldon typically has good sources but Mike Arrington is saying that the rumors are false. I’m not quite sure who’s right about this one but I have to say that it makes a lot of sense. Imagine if Facebook was integrated into your Outlook and AIM and you immediately had the ability to sync all your contacts across applications with Facebook acting as the backbone.

This would be amazingly useful and would boost Facebook’s value drastically. I have ,a href=’http://www.adweek.com/socialtimes/2007/09/mr-zuckerberg-tear-down-this-wall/’>argued before that Facebook will ultimately have to open up completely. I still stand by that and I think 2008 may be the year that they do. The issue really surrounds timing. As long as Facebook is growing at an insane rate, there is no reason for them to open up. This was much of the rationale behind Arrington’s statement that there is no definite acquisition taking place.

Whatever the case, an acquisition definitely makes sense as a long-term play and Facebook is going to need to start releasing new features that justify their valuation. This would be a big move and would definitely be a strategic alliance. For those not aware of Plaxo, they were famous for constantly spamming users to get them to update their contact information that their friends were registering.

Then a couple weeks ago Scoble got banned for testing out a new Plaxo tool that crawled Facebook and imported all your contacts into Plaxo. He was allowed back but I can guarantee that the Plaxo tool will not be allowed back into Facebook. This is all tension that is leading to the eventual portability of social networks.

It is looking like 2008 may be the year of identity portability. It’s a big task but big things are taking place. Will one of the historic landmarks be Facebook’s acquisition of Plaxo? The jury is still out on that one.