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America Online to Buy Internet Chat Service for $287 Million (1998)
- WaterSponge 13y agoEither 300mill was a steal for AOL or Valuations are out of hand?... Which one is it?
- chongli 13y agoA steal? Nobody uses ICQ anymore. AOL ended up selling ICQ for $187 million in 2010, a big loss on that deal!
- ulfw 13y agoAnd where is the guarantee that ten years from now people will be using Whatsapp?
- nilkn 13y agoI'm pretty sure that's his point.
- sirkneeland 13y agoAlthough with our ridiculous tax scheme they probably got to claim a fat tax deduction from the loss or something...
- majormajor 13y agoWell, 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 be very un-sticky in terms of user retention by their nature.
- ama729 13y agoApparently 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 https://en.wikipedia.org/wiki/ICQ#History
- mattmanser 13y agoIf I make $10,000 a year yet spend only $1,000, I'd be highly profitable too. Not worth a lot though, as the subsequent sales showed just how much money they'd lost.
- aryastark 13y ago> has an online messaging service ever been able to really turn a huge profit? You could make the argument that Tencent did, as some are apparently doing when comparing them to Snapchat and seeing visions of billions dancing in their muddled heads. But that ignores the Asia factor. Where it's not uncommon to find one conglomerate company making toasters, lamp shades, bars of soap, and rockets. Tencent makes video games and they also run the equivalent of PayPal. And, of course, they pimp out their cuuuuute mascot. Since, you know, it's Asia. WhatsApp has a generic-looking icon and no mascot. They are pretty much doomed.
- MichaelTieso 13y agoIs 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.
- fletchowns 13y agoI just knew one of the first comments was gonna be about "my x digit ICQ number". (mine was 6)
- F1reman 13y agoSorry to ruin the party... but I had a 5 digit ICQ number. I used to work there.
- almosnow 13y agothat means you're oooooooollllllllldddddddd
- nobodysfool 13y agoI have a 6 digit also. It's kind of funny because I had forgotten my password but remembered the number, and I saw that I had my old ISP's email address in there so I couldn't reset it. What I did was sign up for a trial dialup account on my old ISP so I would get assigned the same email address, and then did the password reset and cancelled the ISP account. Just so I could keep my 6 digit icq number.
- porter 13y agoHa, nope. I still remember my number too. Crazy.
- p4bl0 13y agoDamn. Now I wish I could remember mine too. I don't and I have no way to find it back.
- slg 13y agoI 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.
- alaskamiller 13y agoTo 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
- codezero 13y agoThis is key. People seem to forget that 15 years ago the Internet was new and not many people used it or had access to it. I imagine that in 15 years (fingers crossed) we'll reflect the same situation where we assume everyone has access to the Internet and not just several billion people :)
- Implicated 13y ago10554049 how do I remember that?
- 89vision 13y ago
- Kluny 13y agoIs this an ironic comment on Facebook's recent purchase of Whatsapp?
- almosnow 13y agonaaah
- securingsincity 13y ago$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.
- securingsincity 13y agooh and the fact that whatsapp actually is very profitable
- klochner 13y agonot very profitable compared to the acquisition price.
- josu 13y ago20 million in revenue last year is very profitable? Twitter makes that in a day.
- MichaelGG 13y agoTwitter generates about $2M in revenue a day. And they make nothing since they're not profitable. So compared to Twitter, WhatsApp is undefined profitable.
- MichaelGG 13y agoIf you can call a P/E of 800+ "very profitable"? Making $20M a year profit is no small thing at all, and I'm sure if it was bought for a billion, you'd see far less comments on the subject.
- 13y ago
- JoshGlazebrook 13y agoI 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...
- codezero 13y agoA fun read on AOL's moderated chatrooms: http://en.wikipedia.org/wiki/AOL_Community_Leader_Program http://en.wikipedia.org/wiki/AOL_Community_Leader_Program By 2000 you probably missed the volunteers, but still interesting.
- bcsmith 13y agoI remember I used to enter the chat rooms by saying "Ever dance with the devil in the pale moon light?" Being a popular quote from the original Batman movie and it went well with my screen name (xsatanx) it usually got a laugh... ... until I stumbled into a religious chat room. Got my account disabled and had to have my mom call as well.
- gcb0 13y agowhen my folks got me a modem, the only thing my father made me understand was the phone bill values... i was 7 or younger. learned all about initialization strings and the minimal about terminal emulation to get to the message and mud games part of some bbs. after that it was downhill.
- elektronaut 13y agoI developed a serious internet addiction when I was a teenager. My parents were working class and struggling to make ends meet, and I was always dreading the day the phone bill arrived. After a couple of confiscated modems (I had a secret backup box of old 28.8s), I realized I could just trade my web skills for money and pay the bills myself. I guess that's what I've been doing since.
- nailer 13y ago40979067. I don't even know how I remember. I haven't used ICQ for 15 years.
- codezero 13y ago338589 Probably we remember because the client made you type it to log in? I forget, but I feel like this is true :)
- jaredsohn 13y agoI think it was due to how you tell people to add you as a friend. There was a search you could do but if you had a common name there would be multiple matches (and I don't think there were photos or a count of mutual friends to help you figure out which one) and perhaps it might have been easier than telling someone to look you up via email (especially since email addresses were often random words rather than first.last@gmail.)
- NDizzle 13y ago274231. I no longer have access to the @r33t.org email address, nor do I know the password. Unfortunate. edit: Looking at the profile it seems that a Russian hacked/took over the account who knows how long ago.
- codezero 13y agoI don't even know what email my account uses, but I was able to log in to my account via the web UI, I'm more surprised that I remember my password than I am that I remembered the account number :)
- jforman 13y agohttp://www.icq.com/people/159272/en http://www.icq.com/people/159272/en Thought about selling it on ebay, since six-digit accounts used to fetch a non-trivial amount of money. But decided it wasn't worth the $100.
- 13y ago
- drawkbox 13y agoIt was mainly purchased for the ICQ instant messaging patents rather than userbase: http://www.haaretz.com/print-edition/business/u-s-awards-icq-founders-patent-for-instant-messenger-software-1.25222 http://www.haaretz.com/print-edition/business/u-s-awards-icq... AOL still owns that patent, HTTPS/SSL from Netscape and the cookie from netscape as well. They loaded up on patent nukes in '98: http://news.cnet.com/2100-1023-218360.html http://news.cnet.com/2100-1023-218360.html
- notastartup 13y agoI actually didn't notice the date on this, and thought after Whatsapp, another one?! We are in a bubble now I presume.
- solarmist 13y ago33493376
- _of 13y ago1369500 :)
- ninive 13y ago1315453 - A great collection of memories, indeed ;)
- hazelnut 13y agoThere are still people out there who try to sell their ICQ numbers: http://www.ebay.com/sch/i.html?_trksid=p2050601.m570.l1313.TR0.TRC0.H0.Xicq+number&_nkw=icq+number&_sacat=0&_from=R40&exttype=501 http://www.ebay.com/sch/i.html?_trksid=p2050601.m570.l1313.T...
- digz 13y agoI haven't used ICQ since 2000 or so, but as soon as I read your comment, I immediately remembered my old number! For context, I rarely remember my anniversary. EDIT: I just logged in. Out of the hundreds of contacts I had, there's one sad guy still online.
- booleanbetrayal 13y ago243121 <3
- jcurbo 13y ago7-digit ICQ number here, but since I'm seeing people post 6-digit ones, I'm guess I'm not that special :) Still have my 3-digit Slashdot UID though!
- bane 13y agoI really wish valuation was a measure of how much value you can get out of a company and not how much somebody is willing to pay for it.
- MichaelGG 13y agoIf someone is willing to pay that much money for the company, then you can get that value of it.
- BlakePetersen 13y ago12834982 -- can't believe I can still remember it. I haven't signed on in well over a decade. Kinda proud, not gunna lie. And according to Google, my last nickname was "Blake's Alright", must have been going through some teenage melancholy at the time, haha
- efuquen 13y agoSomeone mentioned about trying to find out if their have ever been any other chat services that have really made a lot of money on it's own, and it sparked memory of an acquisition that didn't happen quite that long ago, Microsoft buying Skype in 2011, and here is a good recent article about it: http://www.theguardian.com/technology/2013/aug/30/skype-microsoft-acquisition-analysis http://www.theguardian.com/technology/2013/aug/30/skype-micr... The bullet point that stands out for me is this: • Problems monetising it: revenues at the time – $860m for the year, losses of $7m – amounted to just $1.30 per user per year So, here we have a company, at acquisition, that was making close to the $1 per year per user that WhatsApp is charging. At the end of 2010 skype had 663 million users and was acquired for $8.5 billion. That's $12.82 a user. Then, as now with WhatsApp, people are questioning whether Microsoft would ever make enough money to justify such a price. Then, as now, people justified the price based on the sort of intangibles (getting rid of a competitor, strengthening the brand, tapping new markets, etc.) the WhatsApp acquisition is being justified with now. But there is still the big difference that Facebook, with a business in a similar space (obviously still different but they both are chat/communication based), with a similar revenue model per user per year, but only 3 years later purchased it for $42.22 per user. That's almost 4x the price for a similar acquisition 3 years apart. And people thought Microsoft was crazy for the price they paid for Skype ... it kind of makes you wonder what the hell is going on.
- jgreen10 13y agoIt seems these types of transactions have nothing to do with potentials profits, but with power over users, or "lying on a bed of weeds and ripping them out before they strangle you".
- justincormack 13y agoAnd with not paying tax - Microsoft has all this money sitting in Europe that it has to pay tax on if it returns to shareholders, or it can waste it on buying companies instead.
- deleted 13y ago[deleted]
- iamsalman 13y agoJust a naive comparison, AOL paid ~24MM/user for ICQ. Facebook is paying ~42.3MM/user for WhatsApp. That's about 76% more. IRC wasn't making any money when it was acquired. WhatsApp was making some.
- jetsnoc 13y ago575061 ;)
- MichaelMoser123 13y agoIt's funny how these ICQ like messenger applications always end up being bought out with heaps of money. When you see it all over for the nth time than its just funny. I mean: you are supposed to learn a real profession so that you will be able to create real value, whereas real value is actually assigned to messenger apps.
- coltr 13y agoWow, I forgot about Tripod. Had a few sites on there.
- petercoolz 13y agowhat exactly happened to ICQ? i haven't used it in years and years
- beagle3 13y agoAnd since this is HN, you probably wonder where the ICQ founders are now? As far as I know, 3.5 out of 4.5 (one quit early) are busy having fun and enjoying life, and the remaining one has since started and sold companies for $100m each at the rate of about one per two years.
- eyeareque 13y agoI remember when this happened. I was quite the upset teenager :)
- chris_wot 13y agoSo was I! Funnily enough, I was right, AOL killed ICQ. Then again, AOL killed most everything they touched.
- gee_totes 13y agoI'm going to speculate that this is a very strategic move from Facebook. Remember BlackBerry Messenger? one of the early selling points of the phone was that BBM let you communicate for free, instantly, with people all over the world. It was pretty revolutionary at it's time. Facebook is already becoming the world's phonebook. Connect with someone and you have a way to contact them. Facebook is also heavily pushing it's messaging app on the main Facebook app. I think that WhatsApp will be integrated with (or replace) Facebook messenger. This combination builds a powerful base for an eventual Facebook phone with a free data/voice plan (the phone would have a base price, but service would be free thanks to the sale of ads ala Kindle Special Offers). Think about it -- if you could call, text, and message all of your contacts, for free, from within the Facebook app, why wouldn't you do it? If Facebook follows that strategy, they will get their 19 billion out of this deal for sure.
- alexeisadeski3 13y ago>BBM let you communicate for free, instantly, with people all over the world. It was pretty revolutionary at it's time. It was not.
- cmarschner 13y agoThey will have a phone