I seek revenue? ICQ goes portal

ICQ, one of the last commercial-free bastions on the Internet, is undergoing a transformation from instant messaging application to self-proclaimed "next-generation communications portal" at the behest of parent-company America Online (AOL). But will its 28 million predominantly Gen X registrants go along for the ride?

ICQ 99a, set for release this week, represents the company's conversion into an all-purpose communications portal replete with news headlines and an Inktomi-powered search engine called ICQIt. (Available for free at http://www.icq.com, more than 700,000 beta users have already downloaded the latest version.)The way the company spins it, ICQ's evolution to for-profit portal has been a non-issue thus far. According to Frederick Singer, CEO at ICQ, users were concerned last summer that AOL ownership would somehow corrupt the messaging service. But those concerns have died, mainly because "AOL realises it has a valuable property here. They understand this is not a mass-market community," Singer added.

Net message boards and chat sessions seem to bear him out, as does a big rise in membership. Since AOL purchased Mirabilis, the Israeli creators of ICQ (or, "I seek you"), in June 1998 for $US287 million, the division has been free to grow organically. The result: membership has bulged more than two-fold since the buyout, all by word-of-mouth, or "word-of-mouse" -- as ICQ officials call it -- marketing. (At the conclusion of the registration process, users are asked if they want to sign up friends or coworkers.)Mainly due to its loyal, international audience -- an enticing group for advertisers looking to tap the relatively slippery Gen X, gadget-buying demo -- it's clear AOL has big plans for ICQ as a revenue-generating unit. And with some six million active users, ICQ qualifies as a top-25 Internet destination.

ICQ officials envision offering user-generated chat areas to introduce related marketing messages from sponsors. ICQ Now, another new feature, is a pop-up window that details which members are organising at any given time. ICQ Now also contains discussion categories, such as romance, in which members could theoretically discuss the best places to get last-minute Valentine's Day gifts.

AOL has already been talking to advertisers about selling space for banner ads or other forms of marketing on the property. And ICQ may be part of AOL's plans to wring commerce dollars out of users and advertisers.

"An auction would be a perfect fit for ICQ," says John Borthwick, vice president of development and programming. He suggests that a shopping category could be added to the service, or an icon such as a dollar sign or "for sale" sign could appear alongside a user's name indicating that he or she has a product to sell.

Singer and Borthwick say it's more likely that advertising would arrive on ICQ before commerce. But, they add, there is no urgency at the moment to sign deals.

"We don't have to break even just for the sake of breaking even," says Singer.

So far, complaints posted to ICQ's message boards about the new portal are relatively benign, and none seems to pertain to the impending commercialisation of the service.

"The users haven't told us they don't want to be involved in e-commerce" or even that they don't wish to be subjected to marketing messages on ICQ, says Singer. And ICQ officials insist they'll be true to the original flavour of the service. That is, because ICQ programming is derived from the users, the company has to adhere closely to their threshold for marketing messages.

Of course, people don't normally complain about services they don't even know exist, and it remains to be seen how users respond when ICQ first implements any advertising sponsorships or e-commerce initiatives.

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Bernhard Warner

PC World
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