I don't want to rehash the news that you've read on 10 other blogs already. Suffice to say that Michael Jones' UserPlane has been purchased by AOL. Tech Crunch, GigaOM, Download Squad and angel investor, Jeff Clavier have covered it well.

In Download Squad's interview, Michael Jones points us to a timeline of the Company's history. They bootstrapped the company without taking an institutional round of investment. According to the timeline, they started with services revenue model. They moved to an application service provider model for dating and social networking websites. Then, they moved to an ad network model, where they served ads on their partners' websites while letting them use the UserPlane suite of products free of charge.

This is an interesting monetization route as the company matured. Not too dissimilar from my Company's course of action. This gives me a lot of hope. Unfortunately, I don't think its a path that most web entrepreneurs take. Most net entrepreneurs try to build a destination site, attract eyeballs and sell ads or follow other monetization routes. It's a lot trickier, though. And its a gamble. UserPlane's model is a lot more predictable. It requires a different set of skills, though. Service revenues, although hard to get if you don't know how to sell or add value to other organizations, are predictable. It also allows you to perfect the service to get it to the point so that the application is easier to adopt. The ad model is the ultimate outcome because more people will try your product if it is free. And if value can be delivered immediately to new people that are trying the product, there is little barrier to viral adoption. If there is little value to viral adoption, don't make price a barrier to trial, because someone will come along with a free alternative. Therefore, make it free. Ad support it. Grow your distribution.

Fortunately for UserPlane, as exponential growth began to occurr, they had someone with experience supporting large user numbers... And someone with experience selling lots of online ads... come along and buy them out.

I don't know that the startup to exit could have been executed any better than UserPlane just did it. They transitioned between 3 business models and they did each one of them at the right time to take their business to the next level. They should certainly be proud of themselves. There are few entrepeneurs that could do what they did in the last few years.