112 lines
4.1 KiB
Markdown
112 lines
4.1 KiB
Markdown
---
|
|
created_at: '2014-02-21T22:44:53.000Z'
|
|
title: America Online to Buy Internet Chat Service for $287 Million (1998)
|
|
url: http://www.nytimes.com/1998/06/09/business/america-online-to-buy-internet-chat-service-for-287-million.html
|
|
author: ski
|
|
points: 222
|
|
story_text: ''
|
|
comment_text:
|
|
num_comments: 142
|
|
story_id:
|
|
story_title:
|
|
story_url:
|
|
parent_id:
|
|
created_at_i: 1393022693
|
|
_tags:
|
|
- story
|
|
- author_ski
|
|
- story_7279965
|
|
objectID: '7279965'
|
|
year: 1998
|
|
|
|
---
|
|
Moreover, he said, ICQ users spend an average of 75 minutes a day on the
|
|
service, compared with fewer than 10 minutes a day for highly touted
|
|
search and directory services such as Yahoo and Lycos.
|
|
|
|
Many Internet stock analysts praised the deal as an inexpensive way for
|
|
America Online to increase its customer relationships. The company's
|
|
shares rose $1.50 yesterday, to $84.75. But there is some skepticism
|
|
that chat services, no matter how popular, will turn into big money
|
|
makers.
|
|
|
|
''E-mail, chat and instant messaging are not good advertising
|
|
platforms,'' said Bo Peabody, the chief executive of Tripod, an on-line
|
|
community service recently bought by Lycos. ''When you chat, you look at
|
|
what you are writing, not what other people are writing,'' he said.
|
|
Moreover, advertisers worry that their advertisements will be associated
|
|
with content that they do not control and may be embarrassing. As a
|
|
result, chat services that do take ads receive the lowest rates of any
|
|
type of Internet service.
|
|
|
|
That has not stopped other companies from buying similar services. Most
|
|
notably, Microsoft paid a reported $400 million for Hotmail, which
|
|
offers free E-mail services. (Unlike ICQ, Hotmail had started to sell
|
|
advertisements.)
|
|
|
|
## Newsletter Sign Up
|
|
|
|
[Continue reading the main story](#continues-post-newsletter)
|
|
|
|
###
|
|
|
|
Please verify you're not a robot by clicking the box.
|
|
|
|
Invalid email address. Please re-enter.
|
|
|
|
You must select a newsletter to subscribe to.
|
|
|
|
You agree to receive occasional updates and special offers for The New
|
|
York Times's products and services.
|
|
|
|
### Thank you for subscribing.
|
|
|
|
### An error has occurred. Please try again later.
|
|
|
|
[View all New York Times newsletters.](/newsletters)
|
|
|
|
Mirabilis also helps America Online's efforts to expand overseas. About
|
|
40 percent of ICQ's members are in the United States, 40 percent are in
|
|
Europe and the rest are spread elsewhere.
|
|
|
|
Mirabilis was founded two years ago by four Israelis in their early
|
|
20's. With a few million dollars in backing from local investors, it has
|
|
built one of the most popular services on the Internet.
|
|
|
|
Yossi Vardi, the Mirabilis chairman, said the company had been in
|
|
discussions with a number of suitors since last August. But they were
|
|
initially put off by the price the company wanted. ''People were quite
|
|
amazed with our growth and it took them a while to come to grips with
|
|
that,'' he said.
|
|
|
|
America Online agreed to pay $287 million in cash up front and up to
|
|
$120 million in additional payments starting in 2001, depending on the
|
|
performance of Mirabilis, which will continue to be run as a separate
|
|
subsidiary in Tel Aviv.
|
|
|
|
Advertisement
|
|
|
|
[Continue reading the main story](#story-continues-4)
|
|
|
|
America Online's own Internet chat service, AOL Instant Messenger, will
|
|
continue to be a separate product mainly to allow Internet users to
|
|
communicate with those on America Online's service. America Online will
|
|
also provide some technical support to Mirabilis.
|
|
|
|
Mr. Peabody of Tripod said that since America Online now controlled the
|
|
two largest chat services it should embrace an open standard that would
|
|
allow the user of any chat service to send an instant message to a user
|
|
of a competing service, much as electronic mail works now.
|
|
|
|
''Now that AOL has a monopoly on the instant messenger space, I'm
|
|
hopeful they will open the market to everyone,'' he said. Tripod hopes
|
|
to offer its own message service and such a standard would help it break
|
|
into the existing market.
|
|
|
|
Tricia Primrose, a spokeswoman for America Online, said that there were
|
|
no standards for instant messages now, but that ''historically AOL
|
|
supports open standards that gain critical mass and acceptance by
|
|
consumers.''
|
|
|
|
[Continue reading the main story](#whats-next)
|