A brief interruption of my holiday schedule to announce a great news: portfolio co Userplane has been acquired by AOL LLC a couple of weeks ago, and I just heard that the official press release is now up there. I started working with the three founders of the company, Mike Jones, Nate Thelen and Jave Hall, over a year ago, and it is really with delight that I am congratulating them, and the whole team, for such a great outcome (that I will not give any detail about, as AOL has elected not to disclose any financial information about the deal). So let’s just say: a great outcome for all involved.
Userplane is in the business of powering online communities with a suite of communication tools: Instant Messaging, Chat rooms, A/V Recorder – on a white label basis. The original model was to license these tools to very large social networking and dating sites (MySpace, Friendster, Date.com,…), to which a free ad-supported version was added in June 2005. Now, about 120,000 communities use this suite of zero-install, zero-download communication products reaching millions of users in 25+ countries. The ad-supported version recently broke the billion monthly ad impressions, adding meaningful revenues to the bottom line of the company which had been profitable for a long time. A lot has happened indeed since that initial TechCrunch profile.
Userplane is joining the AIM group, inside the AOL Audience Business Unit, and will be overseen by Marcien Jenckes – the head of the AIM team, and Tina Sharkey – who runs IM and Social Media at AOL. Tina and Marcien are both based on the East Coast, but the whole team of 12 – and the 6 or 7 additional resources they will need to hire in the short term to build the business to a new scale, will remain in Los Angeles.
Ever since I met Mike Jones at BlogOn 2004, Userplane’s founders had earned my respect for having built a sustainable business purely on cashflows, without ever taking outside investment capital. They had been approached numerous times by potential acquirers and VCs, and decided to stay the course until the right offer came: a great termsheet, from the right firm, a Tier 1 VC from Sand Hill Road that could really help the business grow. But it just so happens that someone “high up” at AOL had decided that Userplane was a strategic asset, and pushed for an acquisition to happen swiftly. This was a very smart move.
It is always a moment of mixed feeling to have one of your companies acquired. On one side, it is a tremendous achievement for the team, and the just reward for the hard work the founders have put in over the past 5 years. On the other hand, I really had a blast working with these guys – and there is always the question of what (and how much ) could have been achieved by building the company further. I am however really happy for my friends Mike, Nate and Jave – and have to thank Marcien, Tina, Tom, John U, Christine, Stephen, Laura, Mark, Jorge, Jim and Jon – and all the AOL people I have not mentioned – for all their efforts in making this happen. As I said – a very smart move.