Here's the inside scoop on AOL's purchase of ICQ, the Internet Messaging application that many CASI Members use to communicate in real-time. www.icq.com My personal feelings are thing : I hope ICQ sticks with the ICQ program and not the AIM program - I found the AIM program bulky, unattractive, and hard to use. However, ICQ could take a lesson from AIM in routing around a firewall - can't use ICQ at work but can use AIM! -Jesse SBC C&C - Pa wrote: > Robert Siedmans newsletter for those who don't get it > > Charlie > NE pa. > > > >===================================================================== > > Seidman's Online Insider - Vol. 5, Issue 20 > > Visit the Online Insider on the Web for additional content and > > access to the Insider Talk discussion forums. > > < http://www.onlineinsider.com > > >===================================================================== > > > >Copyright (C) 1998 Robert Seidman. All rights reserved. May be > >reproduced in any medium for noncommercial purposes as long as > >attribution is given. > >AOL Buys Mirabilis > >================== > > > >America Online announced on June 8 that it acquired Mirabilis, the > >Israel-based software development company that created the "presence > >management" product ICQ (pronounced "I-Seek-You"). ICQ is a "buddy > >list"-style program like AOL's Buddy List and AOL Instant Messenger, and > >Yahoo!'s Yahoo! Pager. These products let you know when friends, > >families and co-workers are online (provided they're using the same > >product) and it lets you communicate with them one-to-one in real time > >via text messages. > > > >AOL, rumored for about a month to be acquiring Mirabilis for about $300 > >million, bought it for $287 million. AOL also will pay Mirabilis' > >owners up to an additional $120 million over three years based on > >subscriber-growth levels. Mirabilis will continue to operate from Tel > >Aviv. > > > >Mirabilis reports that there are more than 12 million worldwide > >subscribers to the ICQ service, about half of whom use it regularly (at > >least monthly). Mirabilis never really worried about having a business > >model for ICQ (it has no revenue model). Its plan was to grow ICQ as > >quickly as possible. Via word-of-mouth and being first in the Internet > >market (although AOL's proprietary service had the Buddy List and > >instant messaging before ICQ, its Internet-based version of the > >software, AOL Instant Messenger, was released months after ICQ had > >become available), ICQ quickly scaled to millions of subscribers. All > >along, Mirabilis figured that if it could grow ICQ fast enough, the > >value would be in the relationships with millions of subscribers. It > >would either figure out a business model or sell. The strategy paid > >off. > > > >*Thanks for the Great Idea!* > > > >Interesting: One insider noted that Mirabilis got the idea for ICQ from > >AOL's proprietary Buddy List. As it was told to me, there wasn't really > >any access to AOL from Israel until AOL bought an Israeli-based maker of > >chat software (Virtual Places), Ubique. Ubique was sold last month to > >IBM (which plans to integrate the technology into its Lotus Notes > >product). According to my source, a manager at Ubique had a good > >relationship with a company called Zapa that specialized in game design > >and development. One day some folks from Zapa came to Ubique and saw > >Ubique's products as well as AOL (including Buddy List, which is > >definitely one of the coolest things on AOL). A short while later, my > >source says, four of Zapa's employees left to found Mirabilis. If > >that's true, Mirabilis executed on the idea it got FROM AOL to begin > >with, and made almost $300 million FROM AOL. I find that funny, but > >it's still a good deal for AOL because they would not likely have built > >something on their own, as Mirabilis did, that wasn't based on the AOL > >brand. > > > >*Not the Easiest* > > > >ICQ has more functionality than AIM. For example, you can directly > >launch a Microsoft NetMeeting call with one of the people on your ICQ > >list. But, while the product is more functional than AOL, the interface > >for the core function of the buddy list and the messaging is nowhere > >near as easy to use as AOL's own Buddy List-Instant Message combo or as > >easy as the AIM interface. Also, ICQ at times seems burdened by the > >number of people logged in. I find that the service frequently goes up > >and down. > > > >*What's the Model?* > > > >Why would AOL pay potentially more than $400 million for a service with > >no business model? My guess is that it IS because AOL thinks it's all > >about the relationships. AOL surely will add advertising to ICQ and > >likely will try to figure out a way to let ICQ and AOL/AIM customers > >communicate across the two services (shared address space). This should > >be fairly easy (in theory), as AOL's address space is alpha-based and > >ICQ's is numeric-based. > > > >Microsoft has yet to play big in this space, though in February it > >bought a technology company that makes presence-management software. > >You can bet Microsoft will promote the technology from its forthcoming > >"Start" page and from Hotmail. It isn't a stretch to think that the > >technology will wind up being built into a future version of Internet > >Explorer and ultimately the operating system. > > > >*AOL Wins Anyway* > > > >My bet, though, is that all of that won't give Microsoft enough of a > >competitive boost -- especially if AOL/AIM/ICQ can share the address > >space -- unless there becomes a standard protocol that everyone > >(including AOL) will use. Microsoft is pushing for such a standard (it > >has 0 users for its product), but AOL -- with millions of users for > >Buddy List, AIM and ICQ -- likely isn't interested in seeing an open > >standard that anyone can use. Even if there does become an open > >standard for this, if AOL doesn't adopt it, the standard likely won't > >take off (this would seem to be an approach Microsoft understands very > >well!). > > > >Without a standard that everyone uses (again, everyone, including AOL), > >multiple services won't get enough usage. Why? Because signing up for > >one would be like signing up for a new long distance service that has > >really great rates -- BUT that allows you to call only people who are > >also on the network. And guess what: Almost everyone you know or want > >to talk to isn't on the network. AOL has critical mass in the address > >space. ICQ was the only other service with critical mass. ICQ also has > >a high percentage of international users, a sector AOL is very > >interested in. > > > >AOL wins anyway. Why? Because Jerry Michalsky is right: Buddy lists > >are a great communications tool and will be important. Everyone is > >going to want to build buddy lists into their applications and Web > >sites, and they're going to wind up wanting to use the "network" that > >most people are already on. Part of the beauty of the Internet is that > >it lets people interact with people. So, the beauty of AOL, for example, > >isn't that it lets you communicate with AOL; it's that it lets you > >communicate with anyone on AOL. If you're a customer-driven business, > >part of the benefit of the Internet will be giving your customers the > >opportunity to talk not only to you but to one another. Buddy lists > >will be one such tool. The way it looks now, you have to figure a lot of > >these companies will be turning to AOL. > > > >*A Chat With Ted Leonsis* > > > >After the above piece had been written and edited, I had a chat with > >AOL's Ted Leonsis. While Mirabilis will continue to be based in Tel > >Aviv, it will report to Leonsis who is president of AOL Studios. > > > >"ICQ, as it is today, is a communications centric service. We will build > >it out and continue to offer it free of charge -- we will not commercialize > >it; we will keep gaining market share from an audience that is not > >coming to AOL. We will be able to go after the young, web saavy > >market and pincer Yahoo and Excite which are trying to become more > >like AOL," said Leonsis. > > > >"ICQ," added Leonsis, "will evolve into a next generation portal." > > > >"ICQ," says Leonsis, "is a persistent client. It stays loaded on the > >desktop.It builds its brand every minute. It is sticky like AOL. From > >this vantage point, we can add functionality, and manage more of the > >desktop, by downloading more and more apps. Further, we can use the > >client to create a communications based portal." > > > >"The portal metaphor would be a people browser, rather than a page > >/content browser," Leonsis says. "The end game is to find people...not > >to find pages." > > > >Leonsis said at this point there are no plans to add advertising to ICQ > >or to even share the address space with AOL's AIM/Buddy Lists. While I > >understand the desire to keep the AOL brand and ICQ brand separate, I > >think it is a mistake not to combine the address space as allowing > >people to communicate with more people would be better. Then let them > >use whichever client they prefer, ICQ or AIM/Buddy Lists. I got the > >impression the desire to keep the address space separate was purely a > >brand consideration. > > > >Leonsis said that he could see ICQ branching out into other desktop > >applets like calendars and scheduling. Leonsis said it was possible > >that ICQ could be used to drive traffic to content, but that it would be > >ICQ content and not content branded as AOL or AOL.Com. He indicated > >that ICQ would absolutely not be used to drive traffic to AOL.COM. As > >for the business model, it's a familiar tune, according to Leonsis. > > > >"It is the old AOL paradigm all over again," says Leonsis. "Start with > >an audience; build a brand, make communications the killer application, > >add programming and navigation and search to the mix, and make a > >business model." > > > >ICQ is the most popular download on CNET's DOWNLOAD.COM. For the week > >ending June 27, ICQ had over 950,000 downloads (yes, almost 1 million in > >one week). The nearest competitor, WinZip had only about a 10th of the > >downloads (over 97,000). By contrast, Yahoo!'s pager had almost > >71,000. > > > > >