Small Business Blog

The New York Times recently reported the potential sale of business and social networking site Plaxo.

Plaxo claims about 15 million registered users, and despite that fact that the site is not yet profitable, the asking price is said to be around $100 million.

Plaxo started out as a kind of electronic Rolodex management tool - we all remember receiving multiple uninvited emails asking us to provide our updated contact information. The company changed tack recently and launched Plaxo Pulse, a service that compiles information from competitors MySpace, Facebook, and other social networking sites.

What does this mean for your business to business networking strategy? What sites can you, the small business service professional, rely on for the referral marketing services and tools you need before they change functionality to keep up with their competition? We wonder how many people actually liked and used Plaxo for what it set out to do for them (manage contacts) as opposed to what its mission is now (collect information from other social and business networking sites).

Surely many business professionals used Plaxo as a supplemental tool for their referral marketing strategy – what better way to refresh your new business leads than constantly reminding people of your presence with a friendly contact information update email? Trouble is, without a personal relationship and a “first degree of separation” communication, it started to feel like spam – and frankly, in my opinion, it was. I stopped responding to the requests and they went right into my delete folder, even if they were from people I knew and worked with regularly. It was obvious they were automatically generated and had nothing to do with the professional relationship I shared with the sender. It was also obvious there was no return for dedicating my time to fill out the form.

When Sean Smith wants my updated contact information, including my cell and home numbers, you can bet I’d be more likely to respond if he’s offering something - like a qualified referral – in return.

Why would Plaxo consider MySpace and Facebook rivals in the first place? Certainly their strategy (automatic emails to a user’s database of contacts) was flawed, but did anyone ever really consider them a social or business networking site?

We believe in doing and being one thing – and doing it better than anyone else. If you’re not going to be a huge social networking site with multiple features, applications, and fun stuff then offer something for your users that will actually affect their sales lead ratio and revenue. For us it’s referrals. Nothing else.

Of course, we’re biased, but Referral Key is just one of the sites that we feel remain elegantly simple and true to its mission. Generating, tracking, and rating professional referrals from a personalized business network.