Corporate America may frown on instant messaging, but more offices are using it to their advantage and others hope to profit from the trend.
Instant messaging may be regarded as a waste of time in many corporate offices, but new studies suggesting that it can increase productivity may open the door for widespread adoption at work. But whether it's a drain on human resources or a boon to the bottom line, for some, instant messaging means a clear path to big profits.
Because the communication tool has long been perceived as a toy for teens and fast-typing chatterboxes, only 18 percent of Fortune 500 companies currently use instant messaging (IM) to supplement corporate interactions, according to Nucleus Research, an analyst firm headquartered in Wellesley, Massachusetts.
"Because IM started in the chat room, it's hard for people to go from AOL to ASAP," said Rebecca Wettemann, vice president of research at Nucleus.
"Why are businesspeople using a product built for teenagers?"
A recent report by Pew Internet and American Life Project showed that 11 million people use an IM service at work, and 53 million have used it at home or in the office. But those numbers have yet to translate into a lucrative market.
By the end of this year, IM conversations will generate $131 million in revenues. But by 2008, that figure is predicted to jump to $413 million, according to the Radicati Group, a technology market research company in Palo Alto, California.
While that may seem like pocket change to the likes of MSN, AOL, and Yahoo - all dominant IM portals - it's quite a profit for smaller, IM-focused companies like Jabber, Akonix, and FaceTime. These new companies are developing customized IM programs for companies who see the benefits of real-time communication.
"Why are businesspeople using a product built for teenagers?" said Apple veteran Glenn Reid, who launched his own IM service last month. His company, Five Across, markets InterComm as an alternative to free and enterprise-class IM systems like those designed by Jabber or Akonix.
"Instant messaging is an incredibly important technology that's still in its infancy," said Mr. Reid from his Palo Alto office. "It is taking off in business, even while the consumer IM providers are heading elsewhere."
Mr. Reid, who led the design team for Apple's iMovie and iPhoto, said once you go IM, you can't go back.
"Fast networks are changing the way we do business - even mom-and-pop businesses have broadband Internet," Mr. Reid said, adding that thousands of people have downloaded InterComm.
"Instant messaging is not going to just go away one day," he said. "It will likely replace old-fashioned systems like email and overnight mail - maybe even the telephone itself."
Although his service is currently free, Mr. Reid plans to make money from InterComm.
"Our model is more like the consumer model in that we're free, with an InterCommPro upgrade for business features," Mr. Reid said, explaining the difference between Five Across and larger companies like Jabber.
"We think this will lead to quicker adoption at the workplace. Jabber is more of an enterprise sale to a whole organization that wants to deploy IM top-down."
Mr. Reid says that several large companies and institutions have expressed interest in InterCommPro, including Palo Alto, California-based design company IDEO, Dartmouth Medical College, American Superior Insurance in Florida, and a middle school in Utah.
Jabber, based in Denver, boasts BellSouth, AT&T, and Disney as clients. Bank of America also is among the 18 percent of companies that allow IM for work-related interactions between employees.
"We use instant messaging internally," said Bank of America spokesman Harvey Radin. "It can be an effective communication tool."
Nucleus found that employees who use IM said it helped them reduce phone and email time, rapidly identify colleagues and resources available for immediate tactical activities, and avoid a phone call for a task that could be better handled by a quick instant message. One user included in Nucleus' report said, "It's another way to communicate, especially if you're on a conference call."
Talk is cheap
Because of IM's association with non-business activities, many companies continue to regard it as a toy that takes time away from work.
"Many of the people who we talked to said, 'Oh no - our company blocked IM,' or 'We'd get in trouble if we used it at work,''' Ms. Wettemann said. "But in actuality, employees can collaborate better on tasks through IM."
Some companies are afraid to use IM because of potential security risks incurred when employees send confidential information through non-secure networks. Another concern is possibly violating company policy about personal communication while in the office.
Nucleus believes that another major factor holding back IM use in the office is its traditionally unprofessional design.
"Companies are going to want to use an IM that incorporates into their existing business environment and looks as formal as their business environment," Ms. Wettemann said.
Corporations may look down on IM for now, but in the future, it may prove just as useful for bosses who want to keep close tabs on their workers.
"The real questions will be whether supervisors seek to employ IM as a monitoring tool," said Jonathan Zittrain, professor and co-director of the Berkman Center for Internet and Society at Harvard Law School.
With IM, employers would be "able to ping employees at any moment, with a very low threshold since no one has to pick up a phone or wander over to a desk," he said. "Employees who would object immediately to a camera monitoring their desk feel IM is far less intrusive."