Yahoo Pitches Promotion to IM Users

CNET

August 9, 2001

Yahoo is sending a message to millions of people who use its instant messenger service.



This week, the company began making unsolicited service announcements over Yahoo Messenger, using chat windows that normally carry messages between people who have agreed to share the system. The first "system alerts" were sent out Saturday plugging a new video-conferencing feature of the IM service.



Yahoo said it plans to limit such notices for now to announcements affecting the IM service, although the company did not rule out the possibility that it might try to promote other Yahoo services or even push ads through the network at a future date.



"Right now we are using it as a forum to alert our users of the new capabilities that they can take advantage of through Yahoo Messenger," said a Yahoo spokeswoman. "However, we are going to evaluate the effectiveness of it."



The experiment comes as Yahoo is testing new services to bolster its revenue, which has slumped in the face of weak online-advertising sales. Among some new offerings, Yahoo has announced charges for services that had previously been free, such as its online auctions. Those moves have sparked speculation that it would soon charge for Yahoo Messenger, although the company has denied that it plans to add fees to the free service.



While IM services are considered a powerful tool for establishing long-term customer relationships, only a few attempts have been made to turn IM into a paying proposition. AOL Time Warner, for example has sold banner ads through its ICQ service. In addition, Yahoo has tried out banners in group chat windows that link three or more IM users in a single conversation.



Yahoo is struggling along with Microsoft to catch up to the IM leader, AOL Time Warner. Adding new features such as videoconferencing could help close the gap, since AOL has said it does not plan to add anything comparable in the near future. Since the videoconferencing feature requires a Webcam, the messages involve an indirect plug for video camera makers, although no particular make is mentioned.



The system alerts that began to appear this week launch when a Yahoo Messenger user logs on to the service. The notice can be turned off for a certain period of time by clicking on a box on the window. But clicking the box only prevents the same message from appearing again. New alerts for new features will automatically appear until a person elects to turn those off as well.



Receiving unsolicited pitches, especially advertisements, in the past has been one of the most reviled aspects of the Internet. But as Internet usage continues to grow globally, advertisements and even charges have become more of reality among Web consumers.



Richard Zuniga, a medical student in Lima, Peru, saw the system alert when he logged onto Yahoo Messenger earlier today. Zuniga was not alarmed by the alert but found it useful. He would not have known about the Webcam feature if it was not for the alert.



When asked about his reaction if the alerts turned into third party pitches, Zuniga also expressed indifference.



"If they just become ads, then I would say, whatever," he wrote through a Yahoo Messenger correspondence. "I would probably pay more attention to them."

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