AOL Instant Messenger: On The Outside Looking In

When AOL Instant Messenger, better known as AIM, first hit the online world in 1997, it took off like wildfire. While AIM wasn’t the first instant messaging application, it was by far one of the most popular and widely used. Whether you used it to stay in touch with friends or as a way to meet new people, AIM not only impacted our culture at the time, but it also laid the groundwork for future social media powerhouses, Facebook and Twitter.

With features like file transfer, emoticons, and the always amusing/irritating ‘warn’ button, AIM attracted groups by the masses. Still, that was then, and this is now. The reality is that AIM can no longer compete with the Facebook and Twitter’s of the world. The once teacher, has now become the student. AOL’s inability to monetize off AIM consistently has continuously been put to question and it seems like its now or never for AOL’s once popular application.

Social Media Versus Instant Messaging

Perhaps the first question that should be answered is if AOL Instant Messenger is actually ‘part’ of Social Media. Depending on who you ask, the term ‘Social Media’ has different origins. One origin that does seem to have some evidence behind it i its use by LinkedIn back in 2004 when they first created their social networking application. Taking a closer look at the term ‘social media’ in regards to Google Trends, you will also note that it has increased in volume quite steadily since 2006. Likewise, if you look at the terms “AOL Instant Messaging” or “AIM,” you will note a significant downward slope.

While some may consider AIM to be part of the social media family, I would make the argument that they are more of the distant relative that provided the blueprints to them. “Buddy Lists,” which live on through Facebook Friends and Twitter Followers, and AIM profiles which are the equivalent of Facebook and Twitter profiles are all examples of the blueprints that social media expanded and improved on.

With social media on the rise and AIM slowly losing influence, it is safe to say that sites like Facebook and Twitter have taken over. It’s not that AIM has lost its usefulness, but rather it has lost its appeal. An easy way to understand this is to compare AIM to cellphones with the most basic functions. You can call out, call in, send a text, and can play snake. What more can you ask for? The problem is that you can, and you will.

Using the same cellphone analogy, social media networks like Facebook and Twitter are the Smartphones with wireless internet access, email capability, a built-in 10 megapixel camera, and all the Bejeweled you want. With options like these, there’s no question why Facebook recently broke 300 million users while AIM remained at a cool 50 million.

What AOL Instant Messenger Can’t Do, Facebook Will

Long before we had sponsored tweets, AIM’s sole source of income was advertisements. Most who used AIM remember them. They would sit at the top of your AIM window just waiting for you to accidentally mouse over them, upon which you would be blasted by a car advertisement or movie trailer. Rather than encourage the user to buy the product advertised, it would more likely persuade them to find ways to remove AIM ads permanently. What AIM failed at, Facebook is determined to succeed at.

In this case, AIM failed to monetize. Yes, they are making strides toward becoming profitable, but their time in the limelight is just about up. Still, if you ask the average Joe how Facebook is making money, they will tell you that it is through advertisements. So what is the difference?

The difference is that as opposed to AIM advertisements that were geared toward a broad audience, Facebook’s advertisements are user specific and geared toward customization and ‘intuitive’ selection. For example, if you don’t like an advertisement that is shown on Facebook, you can send your feedback on why you don’t like it and Facebook will remember it for future reference and will work toward showing you only what you want. On top of that, Facebook has a large, make that huge, database of information on users that marketers would pay hundreds and thousands for. In comparison to data services like Nielsen, where statistical inductions are made, Facebook would able to give exact age, sex, and location to advertisers which would in turn allow them to develop targeted marketing campaigns.

The Danger of “Potential”

If you ask Oakland A’s General Manager Billy Beane what he thinks of ‘potential,’ he’d probably tell you of the dangers in throwing that word around. So many times will a team draft players based on their potential without looking at the numbers only to have them fizzle in their farm system. For investors in online startups, the apple doesn’t fall far from the tree.

Playing along the same lines, when you look at Twitter/Facebook along with AIM, the big difference is that Twitter and Facebook have huge potential, while AOL Instant Messenger had potential.

Yes, Facebook and Twitter are still working at finding a stable source or revenue from their platforms, but AIM’s had nearly 12 years to try and do so.  In fact, although Facebook has only been around for close to 6 years, they have recently managed to generate enough revenue to cover their costs, keeping their cash flow positive. By no means is AIM ready to throw in the towel, but one can only wonder how much longer they can continue to pour in assets.

Earlier this year, AOL gave us a look at the direction they were going with their full integration of “Lifestream” into the AIM application. While it still too early to tell how their relationship with Twitter and Facebook will develop, it is clear that if AIM is to succeed, they will need the help of social media. No longer will they be able to live off the potential that others saw in them, but rather they will have to live off the potential of Facebook and Twitter.