Just ask Yahoo and America Online. Millions of people use Yahoo Messenger and AOL Instant Messenger to trade short text messages at home and at work, but the two Web consumer titans found themselves on the sidelines when it came time to sell their products to professional IT managers.
In the past week, both have decided to pull back on their corporate IM businesses, with AOL handing over important sales relationships to partners with better channels into business customers.
The about-face is a disappointing reality check for the two instant-messaging leaders at a time when corporate interest in the technology -- and the promise of lucrative service contracts -- is on the rise. Even as Yahoo and AOL step back, companies that have long served the enterprise market, such as IBM, Microsoft and Sun Microsystems, have made bold inroads in offering their own corporate IM products.
"While (AOL and Yahoo) have strong expertise with instant messaging, in many cases, businesses are either adopting free consumer technologies or dealing with software vendors who they're already dealing with," said Michael Gartenberg, an analyst at Jupiter Media.
Consumer IM leaders once thought that offering software to enterprise customers would be an easy way to add direct revenue to their businesses. Yahoo, in particular, gives away most of its services for free and supports these products with advertising. While AOL generates most of its revenue from subscriptions, it has long tried to grow the software sales business that it inherited from its acquisition of Netscape Communications in 1998.
But these enterprise initiatives have failed to gather steam. Yahoo tried to sell customised versions of its Web portal and Web-casting capabilities for internal corporate use but dissolved its enterprise solutions division in October 2003.
Last week, Yahoo confirmed that it had stopped selling Yahoo Messenger Enterprise Edition, a messaging software package for use in large companies. A few days later, AOL said it would pull its AOL Instant Messenger (AIM) Enterprise Gateway, which allowed companies to manage internal IM conversations. It plans to hand over its existing AIM-EG customers to IMLogic.
That's not to say the companies are stepping completely out of the enterprise market. Instead, they are tapping business users indirectly.
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