8 Ways to Sunday

NOTE: After posting this entry I later found out that the contents were based on a false assumption on my part (see this entry for more details). I am keeping this entry here for historical and ethical purposes.

A recent article on PC Magazine’s web site discusses a scoop I covered here a couple of weeks ago — the shutting down of MSN’s Messenger service to all but paid subscribers in four contries.

The author, Lance Ulanoff, agrees with my assessment that the decision has more to do with the bottom line than with protecting minors. He also ads some interesting insight into the matter based on his experience working for Deja.com (nee DejaNews, since defunct and bought by Google). His assertion that the very nature of Internet chat making it inherently unprofitable is interesting from a market perspective.

Ulanoff maintains that the main attraction of these services is the people, not the service or it’s advertisers. Nobody comes to a chat group with the slightest interest in product information, hence you can’t make any money off of them. So as long as there are free alternatives nobody will make any money off of chat or discussion on the internet.

The other twist that Ulanoff adds to this story is the notion that the main problem for Microsoft might have been corporate liability. After all, since when has losing money been a deterent to MS when trying to corner a new market? The legal ramifications of chat abuse, however, might lead them to decide it isn’t worth it in the midst of all their other legal troubles. The company declaims all responsibility for the content of chats in its user agreement, but might not be willing to test the strength of that disclaimer in court.

All in all, an interesting read. Frequent IM users ought to give it a look.