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Summary:

Word around the Valley is that Xobni, a San Francisco-based startup that has made a software add-on for Microsoft Outlook, is getting a thorough look-over by Microsoft. This isn’t the first time the company has been the object of Microsoft’s affection. Apparently, the company had previously […]

Word around the Valley is that Xobni, a San Francisco-based startup that has made a software add-on for Microsoft Outlook, is getting a thorough look-over by Microsoft. This isn’t the first time the company has been the object of Microsoft’s affection. Apparently, the company had previously been offered about $20 million but chose to raise VC money and do it alone.

Who knows, this time the price may be right. Bill Gates is one high-profile Xobni beta tester, making it easy for M&A drones to pay up for this company. Xobni’s software uses features of social networking to better analyze your inbox and formulates relationships and other relevant points that help you conquer the chaos called email. I have written about Xobni in the context of email as a social environment.

Given that Xobni will have to go after corporate users to make money from its product, selling out to Microsoft may not be such a bad option. It won’t have to raise gobs of additional money to fine-tune its product, which is still in beta and has some issues (read: bugs) to work through. More importantly, it won’t have to deal with the intricacies of managing sales to large enterprises. On Microsoft’s dime, it can continue to finesse its offering, and Microsoft can help find Xobni an eager audience in its 400 million-odd Microsoft Outlook users.

Xobni’s dilemma is going to be the same one that will be faced by many new age software (or Web 2.0) startups that want to sell to corporations: While many Web 2.0 startups might cut their teeth with consumers, they will ultimately have to knock on corporate doors in order to make money, especially if the online advertising windfall turns into a drought.

At a recent conference organized by Accenture, I moderated a panel on the “New Disruptors,” discussing this very issue with panelists that included Xobni co-founder Matt Breznia, Box.net‘s Aaron Levie, Automattic’s Matt Mullenweg and Peanut Labs‘ Murtaza Hussain. The big question is that of trust, and whether large companies will buy from a tiny startup. It will be a tough sell!

Meanwhile, here’s something to think about: Email remains broken, and it continues to confound and overwhelm us. Most of the problems are of our own making, but then solving them remains an opportunity, as Xobni has shown.

  1. I think that MS could well intergrate this into exchange, mobile and sharepoint.

    I think they should sell.

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  2. I personally find Xobni unstable and the data is offers superfluous. If Outlook improved their search results’ relevancy, I would find no need for Xobni.

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  3. The real question is how far can they go with a plugin? I agree, they need Microsoft’s distribution to companies to make sense of their business model. Unfortunately we may be loosing the product for everything not Microsoft.

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  4. Xobni does nothing to manage email better. It is just a nice toy. I really doubt any company will actually pay for Xobni.

    Xobni’s best bet is for MS to give it away for free as part of Outlook.

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  5. They should sell, but Microsoft is not the only game in town. They should also shop the deal to LinkedIn. Xobni is integral to what LinkedIn does. Put another way, Microsoft + Xobni can be a LinkedIn killer if they make the right next moves.

    More on my blog:

    http://smoothspan.wordpress.com/2008/03/03/10-ideas-to-take-linkedin-to-the-next-level-because-it-needs-it-sorry-guys/

    Cheers,

    BW

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  6. Michael Katcher Monday, April 21, 2008

    Om, would you mind elaborating on why exactly ‘e-mail remians broken’?

    I’ve found that through an intelligent application of Outlook ‘rules’ and GMail ‘filters’ my work and personal e-mails are not only organized but my inboxes are free of everything that shouldn’t be there. In fact Gmail acts as not only an e-mail service, but as a feed reader (filters+rssfwd.com) and of course an IM client (esp. now that GChat supports AIM buddies). Although I get hundreds of e-mails a day, my inbox only sees a much more manageable five to ten.

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  7. I have been using Xobni religiously for months and have turned many co-workers onto the app. I’ve begun to try and sell the idea of having Xobni become a corporate supported app for my company. It is easy to implement and free (for now). Can Xobni stay free? Thats my biggest concern.

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  8. [...] For Xobni, Why It’s A Good Time To Sell [via Zemanta] [...]

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  9. i did not have a great xobni experience. outlook 2007 has enough issues on its own. xobni slowed it down even more and still has several bugs. i don’t see the long-term value here. microsoft needs more than a xobni patch.

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  10. [...] events, among them Reddit (Condé Nast), Auctomatic (Live Current Media), and most recently, Xobni (Microsoft). Fresh from Y Combinator’s fourth annual Startup School ‘08, Graham talks about the [...]

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