Rumor: Xing to acquire Plaxo?

TechCrunch reported late on Friday about a hot new rumor in the social media space. The Germany-based business networking site Xing, according to TechCrunch's Michael Arrington, may be in talks to acquire online address book management company Plaxo. The deal is rumored to be in the $250 million range--a significant buy indeed.

Plaxo, for some background, was founded in 2002 by Napster co-founder Sean Parker. Since then, the company claims to have hit 15 million members (as of September 2006). It synchronizes primarily with Microsoft Outlook address books, but has also formed deals with companies like Yahoo and AOL's Instant Messenger division.

When I met with Xing founder and CEO Lars Hinrichs this spring, he made it very clear that the company believes an acquisition strategy is the best way to spread the company's influence beyond Europe and across the globe. For example, when Xing's team wanted to make inroads in Spain, it purchased regional networking site eConozco. Hinrichs also emphasized that Xing hoped to make some inroads into the U.S. market, so it's not all that surprising that news would surface concerning a potential Xing acquisition of a big stateside name in business networking.

But as we all know, here in the U.S. there's a big obstacle for Xing in the form of LinkedIn--it's virtually unrivaled in its field at the moment. As a result, any influence-spreading acquisitions on Xing's part would have to be pretty major.

So while this is a rumor, and a rather unsubstantiated one at that, it's certainly a deal that would make some sense if it were to materialize.