Newsmaker: AOL's remixed Messenger

AOL Instant Messenger has become an institution for nearly 30 million Americans. But can it ever become a big contributor to the company's bottom line?

That's very much on the mind of the folks who manage Time Warner subsidiary America Online. They want that loyalty to pay off as the Internet service provider seeks to offset declining subscriber rates for its core dial-up service and gain ground on Yahoo, Microsoft and Google.

So on Thursday, AOL activated a free Web-based e-mail account for every customer with an AIM screen name--in effect, a free upgrade for 5.9 users.

The company has also begun to reshape the underlying architecture of AIM, to make it a free communication portal with tools for SMS (short message service), Internet telephony, video chat, instant messaging, file sharing, blogging and now e-mail. That's due this summer.

The stakes are high for AOL. It has lost a growing number of dial-up and broadband subscribers, and it is fiercely trying to be a part of an online advertising resurgence that has lifted Google and Yahoo to astonishing heights.

CNET News.com talked to Chamath Palihapitiya, vice president and general manager of AIM and ICQ, on the eve of the AIM Mail launch.

Q:How does broadband--especially as you just were a vice president at AOL for broadband--play into the new instant messaging services?
Palihapitiya: What we've seen is that IM is very much a broadband behavior. And what people really want is a unified communication experience. They're looking for a service that can do e-mail, IM, SMS, video, voice, and there is no one place for it. What AIM is trying to do is live up to that promise.

When we launch the new AIM, we will be the only service that integrates all of those together. We have a huge user base, and our basic message to them is really simple: If you have a screen name, your AIM mailbox is ready for you. All you have to do is activate it.

How can you possibly catch up to established free e-mail services from Hotmail, Yahoo and Gmail?
Palihapitiya: There are two things we're counting on. One is convenience, the other is the feature set. When we did research, people said that they take their screen name and use it when they sign up for free e-mail. We think that by giving people no reason to go and launch a separate service offers a lot of conveniences.

We believe blogging is also part of communicating.

The feature set we're providing is industry leading. We have the best spam and antivirus service for e-mail, because it's the same that we provide to AOL users. (Last year, we cut spam to our users by 75 percent.) The second point is storage. Two gigabytes of storage--that's enough for all users' e-mail needs.

What we've done on top of that is we've added application-like features. So if you're used to (Microsoft) Outlook, with features like drag and drop e-mail to folders, you can do that using our e-mail product. You'll also be able to un-send messages or check the status of e-mail messages, to see if someone has read it. Lastly, we support IMAP (Internet Message Access Protocol, a secure access to third-party e-mail applications), and that allows us to give a rich experience through Outlook.

Are you expecting Google to rival AOL in the IM market?
I don't know.

What's the future of Triton, the instant chat technology you just started testing?
Palihapitiya: Our vision is that AIM can be the ubiquitous communication service for all consumers. It's powerful, it's free, it's robust. It can do everything you need from making a phone call over the PC, to participating in a video chat, to sending a text message to a mobile phone, to receiving an IM, and now, with AIM Mail, send and receive e-mail from your Aim.com e-mail address.

What we did with Triton--the technology preview of our upcoming AIM product, which we intend to roll out over the summer into the fall--we

More Newsmakers

[Christopher Hall]

"A free upgrade for 5.9 users?"

I'd hate to be the .9 of a user!

[NWLB]

More AOL crude.

Just another example of too little, too late from AOL. People demand POP3, AOL foists IMAP off as a substitute. People want to use outlook, but that doesn?t make AOL money, so they give you lousy rip-offs of it. I don?t see any of this stopping any user defection.

[jegrant]

What?

Okay, I don't see what is so wrong with IMAP. It is a more modern standard and well supported by most common email clients.<br /><br />As far as "people [who] want to use Outlook", that is *why* AOL is offering IMAP with this service - so that it's easy to use both on the web and with separate standalone email clients, such as Outlook!

[Prndll]

It's not just that...

The defections are increasing because more and more people are realizing that AOL (and AIM) is not the digital center of the universe. More and more people are realizing the truth about the security holes and shotty software. More and more people are seeing that there is a better and safer way to be online.

[jaximflash]

How much memory?

I don't think the article said but does anyone know how much memorary you get withy AOL's free email service? 1G like Yahoo? 2G's like Google?

Storage

That's not memory. It's storage space.

Here's how AOL comes to life

"http://theponderingprimate.blogspot.com/2005/05/aol-doa-or-aok.html"

[PCCRomeo]

The problem with AIM is...

That a lot of people think you need AOL to use it. Nearly all users of AIM have or had AOL. If AOL wants to make their stand alone messenger client more widely used, they need to be sure that people know it is free and you don't need AOL.

[Prndll]

lol...

Your not wrong in what you said, but there is a bigger picture.<br /><br />The biggest problem with AIM is the spyware/adware that is part of it. AOL has intigrated it into AIM, elements of AIM designed to spy on you, track you, and direct specific advertising to you. This is not to mention all the holes in AIM. Holes in the software that are well documented and are too numerous to list in this post.<br /><br />The use of AIM is dangerous and should be avoided like the plague. It brings on some very serious security issues that allow your computer to be easily accessed, controlled, and watched. Not just by AOL, but by all manner of hackers aswell. AIM's hack list is out there if you check. It's holes do exist and represent a very real danger.

[jaximflash]

Really? It sounds better than GMAIL

2GB? and IMAP to boot? It may actually be better than GMAIL. Has anyone had any experience with it?

ummm... not at all

Gmail already has over 2 and a quarter gigs of storage and is growing constantly. It also has free pop access, which really is not much different than the IMAP that AOL is offering. Aside from that Gmail has free email forwarding, Gmail's revolutionary label organization system, Google search capabilities for your emails and most of all, it has unobtrusive targeted text ads, compared with the loud random ads that I'm sure AOL has just like in AIM.

[Earl Benser]

Not Hardly...

AIM might capture the 'newbies' and 'aol-ers'. But all the serious <br />internet users I know have long ago abandoned the garbage pile <br />called AOL. And AIM isn't even considered - too many other and <br />better options. Even ICQ has faded into the background. Try <br />Skype for a modern approach - it's IM and free phone calls too.<br /><br />AOL has long lost it's luster as an internet service (if it ever had <br />one). This IM/Email push is strictly a marketing ploy to try to <br />stem the movement of customers away from AOL. Odds are that <br />in another 5 years, AOL will exist only in the history books.

[czerwonka]

for AOL to succeed with this...

For AOL to succeed with this new strategy, two things are VERY important.<br /><br />1. AOL needs to free up screen names or allow additional characters (. _ -) in them. People - especially adults - will not want to move to a new free e-mail/IM offering if they have to use coolgrll38566(@aim.com) as their identity. I'm sure the author of this article would rather have [e-mail] or something like that, but the fact is that all reasonably simple screen names were taken long ago.<br /><br />2. If AOL is sincere about moving away from the subscription model and wants to endear itself to consumers, they should allow existing/previous members to migrate their screen names to free AIM accounts. Currently AOL forces members to fork over a monthly fee just to retain their screen names for AIM/IM, even if they just desire to use AOL's advertising-supported services. When personal and professional contacts all have your current screen name, it's good to keep it...and with the new free e-mail many members would want to keep their currently used screen name. AOL should allow them to do so, or it will alienate many potential users.

He who laughs last...

There's a good chance that AOL has got a clue and is making the right moves lately as part of a growing trend to stop looking like dorks. This webmail thing looks like a great step in the right direction and I've had to eat my words too many times when companies have gotten their act in gear after some big falls (Apple 90's vs. iPod).

[rrohrich]

re: He who laughs last

I really samrt guy I used to work for once told me that being first to market wasn't as useful as being the best in the market. He was one of the few people who understood the BigPicture. ;)