AOL Aims to Cash In on Instant Messenger Success
Washington Post, March 3, 2003
America Online, it seems, can do little right these days.
Its core subscriber base is shrinking, its users are being swamped with junk e-mail, and its financial woes have forced founder Steve Case and other top officials to resign.
Yet in one area, America Online Inc. continues to enjoy spectacular success: It is the leading purveyor of instant messaging, the world's most popular electronic communications tool. The only problem is, the service is free and no one has figured out how to make much money from it.
Every day, about 2.3 billion instant messages are sent around the world via America Online, eclipsing e-mail as the favored way for people to communicate with family, friends and co-workers. About 40 percent of all Americans from age of 14 to 24 use AOL's instant messaging services, the company says.
So it is no surprise that America Online's new senior management, led by chief executive Jonathan F. Miller, has focused on IM, as it is known, as a powerful tool with the potential to provide the company with the fresh revenue needed to restore growth.
AOL has begun trying to sell specialized versions of IM to businesses. For example, it has a revenue sharing partnership with a cell phone company, Nextel Communications Inc., to offer instant messaging to its customers, and it is pushing for more such deals. And while it has no plans to charge consumers for the existing service, AOL is considering selling add-ons such as matchmaking and games.
Instant messaging is the person-to-person ability to send electronic messages back and forth in real time on computers. It once was seen mostly as a trendy alternative for teenagers who otherwise would be chatting on the phone. But without any special help from AOL, it has taken strong hold among workers sitting at their desks...Full Story...
Instant Messaging Gets Down To Business
AOL, Microsoft, and Yahoo focus on growing market with enterprise IM apps
Information Week, March 3, 2003
The market for business instant messaging tools is starting to solidify. At the Instant Messaging Planet conference in Boston last week, it was clear that America Online, Microsoft, and Yahoo have set their sights on turning IM into a mature enterprise application.
Microsoft is readying its Windows Server IM platform for release later this year; Yahoo's Messenger Enterprise Edition is scheduled to hit the market this month; and AOL's AIM Enterprise Gateway is already available. These efforts may end up squeezing out smaller vendors in the space such as Akonix, FaceTime Communications, and IMlogic, which sell tools for managing consumer IM apps in business settings.
Vendors are vying for a market that's expected to grow considerably: Osterman Research released a report last week predicting that the percentage of employees who use IM at companies where it has taken hold will rise from less than 20% now to more than 90% by 2007.
Electronic Arts Inc. started using the technology after it agreed to provide online gaming services to AOL users and needed to use AIM to communicate with AOL contacts. The video game maker has migrated from Microsoft's Exchange 5.5 E-mail plat- form to Exchange 2000, which includes the enterprise ready Exchange IM app, built-in security, archiving, and directory integration. CIO Marc West says he's concerned with the vulnerability of public IM networks. He expects 75% of Electronic Arts' employees to use IM by year's end.
Not Just Kid Stuff
Businesses are finding there's more to instant messaging than exchanging social chit-chat
Information Week, Sept. 3, 2001
To most IT managers, Internet based instant messaging is a toy teen-agers use to swap gossip. At UBS Warburg LLC, it's a tool for trading about $1 billion a day.
Though 100 million people use America Online's market leading instant messaging service, the technology is still viewed with suspicion as a mainstream business tool. Some IT managers ban it outright on company machines, worried that it's not secure enough for official business and that personal use will sap productivity. Yet its informal use is spreading, often without official IT department blessing. A few companies, such as UBS Warburg, are even embracing it.
For stock and bond traders, the right information can be worth millions at the right time, and worthless minutes later. At UBS Warburg, traders used to communicate news and market trends to colleagues on trading floors in Zurich, London, and New York using intercoms known as "squawk boxes." Given the din made by the dozens of people working the phones in a trading room, it was easy for useful information to get lost. "We needed to find another solution because we could make a lot of money if we could get the right information to the right people," says Andy Konchan, UBS Warburg's executive director of E-commerce. As far back as six years ago, the bank, part of the Swiss company UBS AG, started experimenting with Web based instant messaging systems to spread internal information quickly.
UBS Warburg set up instant messaging that let employees form topic based groups to simultaneously inform hundreds of colleagues and clients of a critical development. One group alone, on European stocks, has 1,500 members. In 1998, the company began letting select clients receive messages, and today about 1,500 clients and 14,000 UBS Warburg employees use the system. The bank also let clients send buy and sell orders via instant messaging, which has improved accuracy as well as speed. "It's a more efficient way to do trades than by phone," Konchan says.
UBS Warburg, along with business incubator firm divine Inc., last year spun off the financial company's proprietary instant messaging system into a commercial product called MindAlign. Since then, the company has continually upgraded the system, adding archiving and a feature that lists the 30 most recent messages for a group when someone logs on. But most important is the chance to make close and frequent contact with customers. "Our salespeople can take information from within UBS Warburg and filter it according to our client's preferences," Konchan says. "We get to the client faster than anyone else."
Instant messaging is a set of protocols and an agent that lets users send messages back and forth over the Internet in near real time. The purest form of peer-to-peer communication, it requires both parties to be logged on, so users know the other party is available and accepting messages...Full Story...
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