Yahoo-Google IM Might Grow
Instant messaging, a tiny part between Yahoo and Google Inc., may turn out to be a large motor of growth in the long term. Instant messaging (IM) services don’t generate much revenue; they just serve as guideposts directing netizens to various Internet portals. Google’s push to make Yahoo’s more popular ‘Messenger’ work with its own lagging ‘Google Talk’ demonstrates the importance placed on the feature. IM seems to play a key role in the battle for eyeballs in the mobile arena.
“In the mobile story, IM will be more important,” said Michael Wolf, an analyst at ABI Research. “Right now, it’s a fuzzy business proposition.” Much of the attention around the partnership announced last week between Yahoo and Google has been focused on a search advertising pact between the two Internet search giants. But as part of the deal, the two have agreed to allow users of their competing IM services to communicate with each other.
Analysts say that, in general; IM services relatively generate little revenue. Users see Ads in their lists of “buddies” and some users hit with Ads when logging into the services. But down the line, analysts say, Internet portals will likely be able to better target Ads based on monitoring how their users access such services.
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