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America Online to Buy Internet Chat Service for $287 Million (1998)

nytimes.com

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Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#11

Post by securingsincity »

$19 billion and whatsapp has 465 million users, and ICQ was purchased for $287 million had 12 million users at the time. $40 dollars per user vs $24 dollars per user.

Now if the goal were to acquire users. its far more likely that facebook would have a huge overlap in the number of users it has already and those on whatsapp. That means maybe a cost of acquisition at let's completely speculate $100 dollars per user(maybe more). It seems kind of silly. but then you think about their penetration in developing markets and network effects... I don't know I'm not zuck.

BUT on a complete tangent of my comment. I should start an Israeli chat company. they've had some big exits.

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#12

Post by securingsincity »

securingsincity wrote: post #11

$19 billion and whatsapp has 465 million users, and ICQ was purchased for $287 million had 12 million users at the time. $40 dollars per user vs $24 dollars per user. Now if the goal were to acquire users. its far more likely that facebook would have a huge overlap in the number of users it has already and those on whatsapp. That means maybe a cost of acquisition at let's completely speculate $100 dollars per user(ma…

oh and the fact that whatsapp actually is very profitable

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#14

Post by JoshGlazebrook »

I still remember back in 2000 when we still had AOL. I was eight or nine and I had my own aol account. You could have a dozen or so sub accounts on the main one. And because it was a "kids account" there were chat rooms for kids. Being the lovely kid that I was, of course I went into one and was like "how the f*ck are you all?"

Well the kid chat rooms were moderated and our entire AOL account was disabled. My mom had to call to have it re-enabled and of course they told her what I had said.

Fun times...

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#15

Post by alaskamiller »

slg wrote: post #7

I assume the motivation for pulling this out of the archive is the WhatsApp purchase. However, I don't think this comparison is truly fair. Not only is WhatsApp monthly adding over twice the userbase ICQ had at the time of purchase, but it is also actually collecting revenue from them. WhatsApp is a real company with real monetization strategies.

To contextualize requires relativity.

ICQ in 1999 had about 45 million users. There were only 248 million internet users back in 1999. That's 18% of mostly international users.

AOL was optimistic. So much so this is the actual response when they beat the street during their earning reports.

"(ICQ is) growing like a weed," said AOL President Bob Pittman. "Monetizing it" will be "relatively easy," he added.

WhatsApp has 450 million users where there are 2.7 billion internet users. 16%. Of mostly international users. Where, again, monetizing it, should be relatively easy.

But then again, why does any of this matter?

Genie's out of the bottle. The game has changed. We're playing a game of scaling now. Less than a hundred dedicated folks can change the world.

That 19 billion is a clarion call to attract even more people to what it is most of us here have been doing for decades.

If there is to be a singularity moment for the generation that grew up remembering the difference between real life and internet life, we have arrived at the internet life.

10593577

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#16

Post by colinbartlett »

securingsincity wrote: post #11

$19 billion and whatsapp has 465 million users, and ICQ was purchased for $287 million had 12 million users at the time. $40 dollars per user vs $24 dollars per user. Now if the goal were to acquire users. its far more likely that facebook would have a huge overlap in the number of users it has already and those on whatsapp. That means maybe a cost of acquisition at let's completely speculate $100 dollars per user(ma…

Are you sure there is such a big overlap between WhatsApp users and Facebook users?

The US is Facebook's biggest market but I would bet the US is no where near the top of WhatsApp's market list.

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#18

Post by p4bl0 »

MichaelTieso wrote: post #4

Is it bad that I can still remember my 7 digit ICQ number? It's probably been over 14 years since I've used it. I use to judge everyone that used AIM but eventually I switched over to AIM because all my friends in school had AIM.

Damn. Now I wish I could remember mine too. I don't and I have no way to find it back.

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#19

Post by ulfw »

chongli wrote: post #3
WaterSponge wrote: post #2

Either 300mill was a steal for AOL or Valuations are out of hand?... Which one is it?

A steal? Nobody uses ICQ anymore. AOL ended up selling ICQ for $187 million in 2010, a big loss on that deal!

And where is the guarantee that ten years from now people will be using Whatsapp?

Re: America Online to Buy Internet Chat Service for $287 Million (1998)

#20

Post by ama729 »

majormajor wrote: post #6
WaterSponge wrote: post #2

Either 300mill was a steal for AOL or Valuations are out of hand?... Which one is it?

Well, 300M for 12M users, which is a lot fewer than the services that get bought for big numbers today. But magnitude of the money aside, has an online messaging service ever been able to really turn a huge profit? chongli points out that AOL eventually sold ICQ for less than they paid, and I can't think of any others off the top of my head (AIM didn't prevent AOL from being overtaken by Facebook, say). They seem to…

Apparently it wasn't a bad according to wiki (but the source is in German, so I can't confirm if it's true):

> Orey Gilliam,[6] who also assumed the responsibility for all of AOL's messaging business in 2007, ICQ resumed its growth and turned into a highly profitable company, and one of AOL's most successful businesses.

https://en.wikipedia.org/wiki/ICQ#History

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