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The Business of Instant Messaging

willll writes "The Washington Post is running a story about how AOL plans to make money from Instant Messaging, one of the few successes in recent times for AOL. This article includes plans for corporate versions of AIM as well as discussion on some of the state on instant messaging."

27 of 374 comments (clear)

  1. Isnt it funny by stratjakt · · Score: 4, Insightful

    that the most trivial application of the internet is the most profitable?

    I mean sending text from peer to peer is pretty much the "hello world" of TCP/IP 101.

    Sure the clients are a little more advanced, but the base concept is the same.

    --
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    1. Re:Isnt it funny by SpikeSpiff · · Score: 5, Insightful
      I'll disaggree. I think the value of IM comes from presence, and the magic is in managing buddy lists/availability.

      IM is exciting because you can tell who to contact, and whether they are hearing.

      --
      "All that is required for evil to triumph is for good men to do nothing." - Edmund Burke
    2. Re:Isnt it funny by FosterSJC · · Score: 4, Insightful

      Reminds me of the "Snood Effect". Also, here. (Search: Why Snood Gets No Respect)

      In other words, the real killer apps are simple, addictive, and easily integrate into our current technological life. Tetris did this, (though, admittedly, it was not simple). It does not often happen with non-game applications.

      But consider how different the IM you use now is from the one you used 8 years ago. There have been no changes to the essential nature of the app, just additional fru-fru alterations (rich text, away messages).

      Thus, the real world-sweeping apps (not viruses) are compact, have one or few purposes, and often fill a hole that was there but unknown. Reminds me vaguely of the free long-distance cell phone revolution.

    3. Re:Isnt it funny by sql*kitten · · Score: 4, Insightful

      His point is, AOL didn't invent something like, mp3, or the merge sort, true type fonts or X11. They took a basic net connection, a little db management for buddy lists and a lot of servers to manage connections. No innovation here.

      Like most techies, you've forgotten that not all innovation is technical. AOL used simple technology to create a service that appealed to millions of people. IRC is probably technically more sophisticated than AIM, but it's remained in a niche. Why is that?

  2. Eh... by Lordfly · · Score: 3, Insightful

    Seeing as the advertising revenue has gone down the can in recent months, how can they expect to make money?

    Are people willing to pay for instant messaging?

    Josh

    --
    hookers and grits.
    1. Re:Eh... by Phroggy · · Score: 2, Insightful

      For backwards compatability, it should probably implement AIM/ICQ or Yahoo suport.

      Yeah, and AOL does NOT want you doing that, because they want you to use their client, with their ad banners. There are two AIM protocols, TOC (text-based, documented, limited functionality) and OSCAR (binary, undocumented, reverse-engineered). AOL says using TOC is fine, but you're not supposed to use OSCAR. TOC doesn't let you do things like change your password. Last I heard AOL was exploiting a buffer overflow in their own client to make it return a particular hashed value back to the server, and if the server didn't get the correct response it would kick you offline - so, it was impossible for 3rd-party apps to use OSCAR. Obviously Gaim uses OSCAR now, so they must have backed off.

      Cryptography support.

      Can't encrypt messages if you want to chat with anyone who doesn't use your software. AIM for Mac OS X encrypts log files. Not sure how you'd sign log files in a useful way, since I only ever want to copy & paste an excerpt, not the whole log - but copy & paste is enough to satisfy anyone I talk to that the conversation really took place.

      Stability.

      See above - one reason they crash so much is because they're always trying to stay one step ahead of AOL, which is always trying to get rid of them. And I was told once that the Gaim code is a tangled mess of spaghetti, but that was a long time ago.

      It should be IM client, and nothing else. Do one thing, and do it well.

      Some of the features they add are actually useful, but nobody knew just how useful they'd be until they were implemented. Personally a stock ticker is a retarded thing to put in an IM client, but things like webcam & voice chat support are cool ideas.

      Portability.

      I agree here - why is this so hard? If only Apple had released Cocoa (YellowBox) for win32 and *nix, and everybody started using that. Or if only Qt was free on win32. Or whatever.

      Zero tolerance policy on SPAM.

      It amazes me that AOL hasn't caught onto this, after so many years of abuse.

      Support for modules.

      Might be hard to develop generic module support if you have no idea what kinds of modules might be created. Which feature enhancements need what functionality? Some Apache modules make you patch the source to install them, because if it were strictly a module the functionality wouldn't be available.

      Why are AOL/ICQ, Yahoo, MSN, etc so scared of competition?

      Banner ads.

      Even better yet, make it an official RFC.

      Nobody took it seriously when they tried.

      A real revenue model, not based on ads or spyware.

      How many people will pay money for an IM client, when there are so many free ones available? How much would they be willing to pay? Are these two numbers multiplied together anywhere near the cost of operating the service, let alone developing it?

      I've come to the conclusion that I must write this software myself. Nobody else is going to implement a portable, spyware and ad free IM client that doesn't constantly crash.

      Please do! I'd like to see what you can come up with. Make sure you release a Mac OS X version - you did mention portability. :-)

      --
      $x='S24;r)>63/* h@<5+oZ)32"5cz';$me='phroggy'x$];
      $x=~y+ -xz+\0-Tx+;print$_^chop$me for split'',$x;
  3. Keep it simple by tedDancin · · Score: 3, Insightful

    ..While it has no plans to charge consumers for the existing service, AOL is considering selling add-ons such as matchmaking and games.

    It seems like we could be seeing another piece of IM software drifting down the ICQ "bloatware" path. IMHO, as far as IM is concerned, especially when the aim is to expand into the corporate arena, the less features the better.

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  4. Re:Not feasible by ekarjala · · Score: 5, Insightful

    These concerns are largely unfounded. Any organization that uses a groupware (e.g. Exchange/Outlook) package already has virtually instant messaging through their standard email conduit. Similar predictions were offered when high-speed access to the web came to employee's desktops. As with the web, novelty wears off quickly and everyone still needs to get their job done. In my experience, using IM in the office reduces the impulse for someone to walk to my cube and interrupt me face to face for something "quick" that becomes protracted and a more significant time sync as we converse. I see IM as a filter for "time-suckers".

  5. Re:IM in business? by Montag2k · · Score: 3, Insightful

    I used it in school - a lot. It is great for sending little snippets of code to friends as a sanity check. It's also a great way to stay in touch with friends and family on the other side of the country - you can always tell that someone is there and available to talk, and the conversation is instantaneous.

    I think this would be a great tool for large (think multi-national) companies - it would allow them to bring all of their resources together and I believe it would allow teamwork on a higher level. Of course, this could probably be accomplished with e-mail as well, but IM - as the article said - has that "presence" and spontanaety that really works for good collaboration.

    One last note - I haven't used Netmeeting or similar things yet, but I think it would be a good bet that the way for this type of collaboration software to really get its foot in the door or corporate America is through IM.

    Now all that is left is to get a large acceptance of a nice, open protocol for IM - that is at least the one way it should be more like e-mail!

    -Montag

  6. Sounds good, but will it work? by vga_init · · Score: 4, Insightful
    I have used many instant messaging clients over the years, and have only used AIM for very short periods of time. Every time I use it, I am very surprised at what a spartan piece of software it really is; any other messenger is easily more feature rich, so why don't people use them instead?

    I believe that it is this simplicity that is part of what makes AIM so popular. The average AIM user, which never seemed to be very bright to me, could probably really appreciate the straightforward approach AIM takes to instant messaging. ICQ, which is almost the exact opposite, might repulse those same users, but since AOL owns both, then all is good! They are making use of the best of both worlds, it seems.

    However, I currently use Yahoo as my primary messenger, and I have no intention of switching. As far as I'm concerned, Yahoo has found a happy medium, and provides, in my opinion, a much more effecient and useful system than the aforementioned clients.

    What AOL should be afraid of is users migrating away from them if they get too pushy on the dollar, though since they claim not to be charging money for existing services, they ought to be secure in this area.

    Though I'm not a personal supporter of AOL, I do think that they definitely do have a good opportunity for growth, and believe that any innovations they make might help to benefit everyone.

  7. Re:Not feasible by lpret · · Score: 4, Insightful
    I bet you said the same thing about e-mail. You must realize the difference between chasing fads and quickly adopting standards. I have set up Instant Messaging for a non-profit organization that does a lot of linguistic work, and I have been told that it has increased their productivity simply by letting them communicate easier and faster to colleagues. They are able to communicate with colleagues across the globe, asking quick questions that are vital to a project, and instead of waiting for an email reply (which may be at least a few hours) they get an instantaneous response.



    Another technology that you probably fear is P2P sharing. This is another useful tool that I believe will start to make an impact on the business world. Locutus is what I have set up for them, and they are able to share documents/media that have had to have been requested while still making sure priveleges and security are a priority.



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  8. The next nail in the coffin for AOL by ukryule · · Score: 2, Insightful
    I'm sure there must be loads of intelligent, internet-savvy people working in AOL, but are any of them in managment?

    Company insiders are putting together targeted pitches to capitalize on the demographics of the AOL instant messaging community.

    Do you:

    a) Provide as good an IM tool as you can, which allows you to talk to anyone else on the internet, or

    b) 'Capitalize on your community' by providing an inward looking tool which is only any good when talking to other AOL users?


    An easy one to answer that. Now a test. Look through that article, and count the number of times that interoperability with MS/Yahoo is mentioned. Count the number of mentions for open standards for interoperability. Count the number of potential exciting innovations there (IM to mobiles? News headlines over IM? IM as pushed alerts for updated webpages?).


    Does anyone want to predict how badly AOL will muck this up?

  9. In the business world it's also kind of stupid by JudgeFurious · · Score: 3, Insightful

    Considering that you have email, which you can connect to a pager in case they aren't there, the telephone (ah, old faithful) with voicemail which also can be paging you in case you miss an important call, your cell phone which many of us have permanently attached to our ears, and the list goes on and on and on....

    Personally were I running a business this is about the last thing in the world I would bother spending any money on. That's just me though. Maybe there is some great benefit to this that I don't see. Someone make me a case for why I would need to spend some money on something like this. I'm curious here. Doubtlessly there's got to be something I'm missing.

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  10. Re:How to make IM an integrual part of my work day by Metrol · · Score: 2, Insightful

    Been struggling with allowing customers access to me when I'm sitting down in front of my pc, and I've done a bit of a test.

    Probably a bad idea out of the gate. IM's primary business use is allowing for more efficient internal communications. I'd never give a customer my IM name as a contact, as I couldn't possibly guarantee I'd be right in front of my computer to respond.

    This is where E-Mail is a far better solution. Best tool for the job and all.

    --
    The line must be drawn here. This far. No further.
  11. Re:IM in business? by Anonymous Coward · · Score: 1, Insightful

    > I couldn't imagine using IM in a company.
    > This just seems completely bizarre.

    We use it at IBM. (our own Lotus Sametime, none of this AOL crap) Still sound bizarre to you?

    And as much as it sometimes allows for unwanted interruptions, it's a lifeline for some. We have teams dispersed across the country and a quick instant msg can be more convenient than a phone call. Or it lets you know at a glance if somebody's in the office or online.

    Bottom line: when used in moderation it's very useful.

  12. advertisement banner by mickcim · · Score: 2, Insightful

    What about that advertisement banner at the top of the buddy list? "2.3 billion instant messages are sent around the world via America Online" every day. That means there are a lot of people looking at that buddy list, and in turn that add at the top of it.

    Seems like they are making a good bit selling that add space. Like most other free things making money through advertisement sells like television, radio, and web sites.

    I'm sure there are plenty of companies out there that are willing to pay to have that kind of exposure. Especially if they can reach "40 percent of all Americans from age of 14 to 24."

  13. No Spam! by mark_space2001 · · Score: 4, Insightful
    An interesting line from the article mentions that one reason adults and businesses are turning to IM is that email is increasingly filled with spam. This is a great counter point to Barry Shein's interview earlier on Slashdot today.

    Mr. Shein wants to legalize spam and allow ISP to charge for it, a position that I completely oppose. Shein's proposal will result in more spam and flood our in-boxes with even more junk. Meanwhile, users are grabing any technology that is less spam friendly (and not acrane and difficult to use).

  14. Re:How about IM in IDEs? by Enonu · · Score: 2, Insightful

    That's a pretty cool idea. Why don't you check out the Eclipse IDE, and see about writting the plugin or offering the suggestion. They already have CVS support, so I'm sure a proof-of-concept would only take a few weeks to get banged out.

  15. What I don't understand... by TheDarkener · · Score: 2, Insightful

    is if Instant Messaging has become so popular, how come corporations haven't accepted standardization of it's platform (I.E. Jabber)? Everyone's got incompatabilities with AIM, Yahoo Messenger, MSN, etc. etc. So you've always either got a half-ass client that tries to do them all, or you have a bunch of different ones open all at once to keep all of your contacts happy. Why isn't the Jabber server being used like a corporate E-Mail server, instead of a central server governed by one, multinational company? In my mind, that's just bogus. Would you use fileserver.aol.com to store all of your sensitive marketing/accounting information? I don't think so. So why use a central server for all of your correspondance about the same subjects? Why waste internet bandwidth transferring files to someone 10 feet away from you in the office when you can send it to them through a private IM server? Hell, you can even require SSL connections!! What else could you ask for?

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  16. Making money off IM everywhere by polyiguana · · Score: 2, Insightful

    There's a lot of money to be made in the IM to SMS arena. Companies like Verizon Wireless make tons of money off SMS. At 10 cents per text message, and 2 cents per incoming message, money can go down the drain very quickly. Also, since the average IM message is much shorter than the average SMS message, the amount of money that come in increases. If AOL can promote the use of its servers as means of passing SMS's through between carriers (as inter-carrier SMS is still not ready for prime time in my area), and use it as a means of communication to the home, they can rake in the money. But first they need to negotiate for a cut of the money first. I doubt they are getting a cut of the money from the wireless providers now, simply because the providers are treating AIM messages the same as SMS. But when the AOL domination of the SMS to computer IM market takes hold, I wouldn't be surprised to see them lobby for a cut of the proceeds.

  17. Re:Right by fuzdout · · Score: 3, Insightful

    Yahoo already has this on Yahoo Instant Messenger where you can activate "voice chat" and with speakers and a microphone you can talk back and fourth with who ever has the same.
    You can even set up web cams so the other person can see you :)

    --
    Fuzdout
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  18. Feasible: Yes; Probrable: No. by Rufford · · Score: 3, Insightful

    What I'm interested in seeing in the IM software is how they are going to set up the hierarchy. Will the sensitive business information exchanged between two engineers designing the next best product be traveling around the internet? Or will AOL release a client/server model that will allow a company to contain their information and optional contain messages from/to the outside world?

    My two cents is that most businesses are more ready to take a Microsoft answer in the all-in-one suite or find a open solution if their staff has the time. Besides, AOL IMer is nowhere near business app status.

    And to those that don't think IMs have a place in business or that people just trade smiley faces all day, you haven't seen how many meetings are avoided by simple online real-time at-your-own-computer-and-chair chat.

  19. Why should AOL make money with it? by g4dget · · Score: 4, Insightful
    IM may look like a service being offered by AOL, but it really isn't. IM could be provided in the same way that E-mail is: through our ISPs. That is, each ISP would run an IM server, just like they are running an SMTP server, they'd use an open protocol, and your IM id could be the same as your e-mail (or maybe not, if you don't like that). That's, effectively, how IM started out on UNIX and mainframe systems, long before AOL or any of the other players.

    It's a historical accident that, instead, we have this kludgy, centralized, closed infrastructure that's owned by AOL and a few other players. If AOL goes away and takes their "free service" with them, all the better, as far as I'm concerned. But we'll probably have to listen to this kind of whining over and over again.

  20. Re:How about IM in IDEs? by Bodrius · · Score: 2, Insightful

    From my point of view, 70-80% of the time technical or formal arguments are better expressed in written format.

    This is perhaps even a higher percentage in the case of code, or even pseudocode. This is partly because talking about "{ i+=p/w*x; print("@poit"); i^=2;}" is inconvenient, but also because it avoids confusions by forcing people to put things clearly before "opening their mouths".

    --
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  21. Who in their right mind would pay for that? by forgoil · · Score: 1, Insightful

    First off, in a corporate environment you can pay for IM, but then it has to be something more than simply the same stuff you can get for free. And it is the same old "buy the software and use it" that is going to do then.

    I am quite sure I could get tons of people to switch to Jabber the second they would have to pay for AIM/ICQ/MSN. I would be one of the first to close down my ICQ and MSN (which I never use anyway) accounts and in a last message tell everyone that if they want to contact me, do it on jabber, because I will never touch this crap again.

    How could they ever make money on this?

    The upside is that all jabber software would improve :)

  22. Re:What about the others? by Anonymous Coward · · Score: 2, Insightful

    Huh? How is it not controlled by IT? IT installs the OS, all of the software, and controls the routers.

    IM has most of the same management issues and potential abuse that e-mail has with users sending each other large files, viruses (virii), etc. so it has the same costs involved with managing it. Also from the corporate perspective, the same account works from home and work only if the company allows its users to connect their IM through an external auth server, which no competent IT department will allow.

  23. Re:What about the others? by jonadab · · Score: 2, Insightful

    > There's no requirement to justify why it has to
    > be installed

    There sure ought to be. IM is *horrible* for
    system stability. There's no way I'd approve
    it for installation on any system I have to
    administer. Especially not on Windows systems.
    You've got email, and you've got a phone system,
    and you've all got mailboxes: you don't need IM.

    I'll support Windows, and I'll even support
    junkware like Acrobat Reader and Flash, but I
    draw the line at IM. Oh, I don't support Bonzi
    Buddy either.

    --
    Cut that out, or I will ship you to Norilsk in a box.