Userplane's Mike Jones Speaks on AOL Acquisition

AOL announced that it was acquiring Los Angeles-based Userplane ( this morning, adding Userplane's many instant messaging, chat, and community tools to its lineup of services. We spoke with Mike Jones, CEO and founder of Userplane, on his thoughts behind the acquisition and what it means to the firm. (Photo courtesy of Martin Schaedel)

Ben Kuo: Congrats on the acquisition! Can you talk a bit about your thoughts behind the sale, and why you decided to sell now?

Mike Jones: Basically, Userplane was totally privately held--no VC capital and no funding. We have been cash flow positive for awhile. Things have been absolutely fantastic, but with the level of growth we thought we might need to take on financing to support the growth of our infrastructure. We went through a review and identified some venture capital firms we felt good about. And, in all honesty, were in the final process on those deals. Then, we were approached by AOL. Through that discussion, we thought this was a better option for us. They bring us AIM compatibility, and as you know AOL is the home of instant messaging and chat as a business model. It all came together, and made a lot of sense.

Ben Kuo: So they came to you?

Mike Jones: Yes, it was fortunate. Through a very funny series of events, they got wind of us and the fact that we were about to close on a VC transaction. I got a great email from Jon Miller that turned into a phone call, and then a bunch of in-person meetings. It came together pretty cleanly. It's a very good fit between the businesses.

Ben Kuo: How long did it take for the transaction to happen?

Mike Jones: It was over a two month period, from the initial conversation until now. It's impressive how well it went through the due diligence and acquisition process. I expected it to be long and involved, but it went really well.

Ben Kuo: I'd think that AOL probably has more lawyers than you have employees?

Mike Jones: They probably do. (chuckle)

Ben Kuo: Are you going to continue providing tools to others?

Mike Jones: The business model is completely the same. It's completely on the path as we're going. We're building out our network and sub-communities that we have, and will continue to be an infrastructure provider. We will add AIM compatibility and work with some of their properties, but we'll continue to focus on providing communications tools.

Ben Kuo: Tell me a bit about how the business will be run--will you be run as part of AOL or separately?

Mike Jones: We'll be separate still, with separate offices. We will be moving from Mid-Wilshire to Santa Monica. We obviously have a lot of synergy with AOL, but will be our own standalone entity, the reason why the deal made a lot of sense. We'll stay in the same roles, and I'll basically continue be CEO of Userplane and to build the business.

Ben Kuo: Congrats, and thanks for the time!





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