General Question

gcoghill's avatar

How can AOL afford to offer their AIM Instant Messenger service to non-AOL users for free?

Asked by gcoghill (139points) October 16th, 2007

I can see how running ads in their software might offset costs, but I use iChat on a Mac and never encounter ads. Especially with file transfer and video chats, it would seem the bandwidth costs would be up there.

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6 Answers

bpeoples's avatar

Who knows these days… in the old days it was to permit the AOL users to chat with the non-AOL users without the AOL users having to learn to use ICQ (and therefore diminish their premium AOL experience)

I think at this point, AOL/MSN/Yahoo just have to keep their services running to prevent the bad PR of cutting out the now-expected service.

FWIW, video chat, file transfer, and audio chat all happen directly client-to-client. It may be more transparent on ichat (I can’t remember), but most clients pop up some scary warning when you try to directly connect.

ben's avatar

Just as bpeoples said. I’d also guess they turn a profit from all the ads on the Windows AIM client.

woodlandanimals's avatar

they also use the email you used to sign up for the account to spam send you offers and advertising. The greatest investment anyone can have in the internet age is market penetration. doesn’t even matter if there is a business model.

mirza's avatar

i agree with others that AOL gets most of its AIM revenue via ads. Also when you are installing AIM, it has offers to download to other programs at the same time so i am guessing it also makes money of the side-programs it installs in your computer

gcoghill's avatar

I suppose with the ratio of Mac users, the impact on the revenue isn’t a big dent, and it’s more important to have it accessible to as many as possible to increase market share.

It’s always been my thought that the less geeky, th eless likely they are to find ad-free alternatives and also the more likely to click on ads.

I wouldn’t even use AIM if it weren’t for most of my friends using it.

Thanks for the input.

lapilofu's avatar

They also get money from the advertising on (which they’re trying to make a big social networking site). But the larger view is simply that bandwidth is cheap, generally and relatively speaking, and having AIM be the ubiquitous instant messaging program is beneficial to AOL as a whole.

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