Comcast Adds Plaxo To Friends List
Cable company snaps up social network.
All social networks are not created equal.
Comcast Corp (CMCSA) announced this morning it would follow a string of media and technology companies down the social networking path. Reuters reports the largest cable TV operator in the U.S. will pay around $175 million for Plaxo, an address book management site.
The price tag seems cheap compared to recent purchases in the online community space. In 2005, News Corporation (NWS) bought the pioneering social network MySpace for $580 million. Last October, Microsoft (MSFT) paid $240 million for a 1.6% stake in Facebook, valuing CEO Mark Zuckerberg's company at around $15 billion. In March, AOL (TWX) grabbed British networking site Bebo for $850 million.
According to The Wall Street Journal, Plaxo already hosts email accounts for Comcast Webmail customers. The company will use Plaxo's platform to increase distribution of its various media offerings and allow customers to share music, videos and photos across all of their electronic devices.
Plaxo draws a distinction between its social network, Pulse, and other sites:
Pulse is not a place to see how many online "friends'" you can collect. It's meant to be a better way for you to stay in touch with the people you actually know and care about - your family, your real-world friends and the people you know from business.
Together, the two companies aim to bring social networking to consumers who may be on the sidelines. Privacy is an ongoing concern for Facebook and MySpace; Plaxo's focus on existing friends and business contacts should help alleviate some of those hang-ups.
The challenge for Comcast -- and indeed for other social network operators -- is to monetize their audience. Internet users are increasingly opposed to clicking on banner and text advertising, squeezing the profits of sites built on this model. But social networks enable users to tell acquaintances about shopping experiences in a variety of ways. The hope is that friends will be more effective brand ambassadors than pop-up ads.
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