AIMing High

In my opinion, the single greatest asset that AOL has is AIM.  It’s the only thing related to AOL that I have used in the past ten years (until they bought weblogsinc) and I use AIM every day.

The amount of real business that is conducted over AIM every day is truly amazing.  Hedge funds use AIM to make trades, developers working together from opposite sides of the world use AIM to talk about their projects, I use AIM to talk to most of my investments every day (via Trillian).

And yet, AIM has been seriously underexploited by AOL for years.

In the late 90s, I was an investor in ITXC.  Tom Evslin, the founder and CEO of ITXC, called on AOL and offered them the opportunity to use ITXC’s global VOIP network to power a VOIP service for AIM.  AIM could have and should have been Skype. But it wasn’t because AOL missed the opportunity to offer a free and easy VOIP service on top of AIM.  I am not saying that they should have done business with ITXC, but they should have done business with someone and gotten agressive about integrating VOIP with AIM.  By the time that AOL did offer VOIP on top of AIM, Skype had done it better.

USA Today has a story today on AIM’s new VOIP service that gives away a free local phone number. That’s pretty neat because a local phone number on Skype costs $4/month.  And for $14.95 per month, you can get unlimited calls over AIM, both local and long distance. I might try out AIM as a replacement for Skype In and Skype Out, but that will require making an effort.  Intertia is a hard thing to overcome.

There have also been reports that AOL is about to launch a MySpace competitor called AIMSpace that will allow AIM users to port their buddy lists to a MySpace style social networking application.

The bad news is that my girls, two hard core AIM users, have already built social networks on MySpace that are as large or larger than their AIM buddy lists.  Maybe my girls and their friends aren’t the target for AIMSpace, but I fear that AOL is again a day late and a dollar short.

If I were AOL, I wouldn’t try to replicate MySpace using AIM as a platform, I’d try to collapse MySpace somehow using AIM.  Maybe that’s what AOL is after by opening up AIM as a developer platform.  But as I’ve said on this blog before, they haven’t opened up AIM fare enough for my taste.

If I could take my buddy list anywhere I wanted to take it, if I could use it to build a social network on MySpace, LinkedIn, or Friendster, now that would be something.

AOL used to be the top dog.  Top dogs use lock-in to control their market position.  That used to work for AOL.  Now it works for Apple, Google, and possibly Yahoo!

But AOL is not a top dog anymore. Underdogs use open systems to undercut the top dogs who are using lock-in.  That’s what AOL needs to do at this point.  And opening AIM all the way to the buddy list is where I’d start if I were AOL.

#VC & Technology