Firms race in IM rush

Mainstream: The online chat tool is growing from a social interface to a business tool with video and phone applications.

September 10, 2001|By Mary Anne Ostrom | Mary Anne Ostrom,KNIGHT RIDDER/TRIBUNE

Instant messaging is growing up. The online chat tool - only recently dominated by talkative teens and technophiles - is going mainstream.

Underscoring IM's consumer and commercial potential, the Internet's major players - Microsoft, AOL and Yahoo - are in a race to make the technology - which lets people communicate online in real-time - a hub of their Web offerings. They are promoting IM as a way to make the computer experience speedier and more flexible, and hoping that it can lead the revenue-strapped Internet sector to the next pot of gold.

Microsoft is the latest to weigh in, linking its newest IM product, Windows Messenger, to a host of video, audio and text applications - all bundled in its Windows XP operating system, due out Oct. 25.

In June, Yahoo added a video function to its Yahoo Messenger.

Yahoo advertises turning the PC, in effect, into a telephone, teasing consumers by asking: "Does typing take too long?"

And AOL, whose Instant Messenger is still the IM leader after its "Buddy List" nearly became a household phrase, is trying to protect its turf with new offerings.

The result is that what started as a simple, text-based conversation format is developing into a new platform for online communications that seeks to imitate the most popular features of Web portals and browsers.

In recent months, all sorts of bells and whistles have been added to instant messaging, including videoconferencing, document- and photo-sharing, multiplayer games, and browser-imitators that can search for local weather forecasts and movie listings, among other things.

"It's cheaper than flying to a meeting, faster than e-mail and more convenient than the phone," said Jarvis Mak, a senior analyst at Nielsen Net Ratings. "And it's creating a whole new social scene. Instead of asking for someone's home number, you ask: `What is your screen name?' "

Carolyn Cody, 16, a high school senior in San Jose, Calif., boasts more than 100 names on her AOL Buddy List.

"You just can't pick up the phone and see who's talking," Cody said. In contrast, she checks her Buddy List to see who's "talking" and "in five seconds can make my decision if I want to go running instead."

A reliable count of IM users is difficult since many people have more than one screen name. By July 2001, as measured by screen names, nearly 70 million Americans spent an average 3 hours and 15 minutes a month using IM from one of the four leading services, an increase of 20 million users and 30 minutes over July 2000, according to Jupiter Media Metrix.

IM use is poised to grow fastest at work. With Windows Messenger, Microsoft is packaging many technologies it already offers, along with a new "remote assistance" feature that will enable IM users to jointly write, edit - even doodle whiteboard style - on a single document in real time.

You can do some of this today through existing products, but it's not integrated, said Jim Allchin, the Microsoft group vice president who led Windows XP development.

Some predict that, for all the services, there also will be some consumer resistance in an era when privacy fears are growing.

"It can become oppressive, like a virtual pager, or progressive, like a perk that gives you flexibility," said Peter O'Kelly, an analyst with Patricia Seybold Group. "There will have to be a new etiquette."

At the other end of the IM-user spectrum from Carolyn Cody is Jakob Nielsen, an internationally known Silicon Valley consultant who considers the human impact of technology. Nielsen believes IM is "an incremental technology" that will be replaced when browser technology improves. Nielsen only gives his IM screen name to key work colleagues. The rest get an e-mail address.

But while it has taken nearly a decade for e-mail to be fully embraced by computer users, most analysts believe IM will take half that time.

In a new report, "IM: The Sleeping Giant," technology consultant Gartner Group estimates that by 2005, instant messaging will surpass e-mail as the primary online communications tool. And by 2005, IM will be integrated into half of the applications businesses use to interact with customers, Gartner predicts.

"The platform is great for making things happen fast," said Peter Levitan, CEO of ActiveBuddy, which has developed an automated instant messenger function, known as SmarterChild, that speedily delivers a range of information - from biblical references to sports scores.

Earlier this month, using ActiveBuddy technology, Warner Bros. launched "LindsayBuddy," which promotes the debut album of 14-year-old pop artist Lindsay Pagano. IM users get immediate replies to questions about the album and concert dates, as well as links to Web sites.

But so far, IM has yet to prove a moneymaker. Internet users have shown little interest in paying for content, and most IM features remain free. So, advertising is beginning to invade the once ad-free IM chat box. And analysts expect fees will be added as newer applications are developed.

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