Originally created 04/22/01

Jabber juices up instant messaging



Instant messaging is one of the Internet's most popular activities, a staple for gossipy teen-agers and procrastinating office workers.

It also has a well-documented problem: The most popular messaging services don't work with each other. It's as if people with Sprint long-distance couldn't call AT&T customers.

Fixing that problem isn't proving to be easy. And while the Internet's biggest players are fighting over the mess, they could be leaving an intriguing opening for a 45-employee company in Denver called Jabber.com.

Jabber.com has created an "open-source" form of instant messaging, meaning any programmer can see how it works and design applications that work with it.

While the big players fight over consumers, Jabber is using its open-source technology to reach for a largely untapped market with real money in it -- selling instant-messaging services to large companies.

"We don't need to beat AOL and Microsoft and I don't think we'll beat them," chief executive Rob Balgley said. "We're targeting a part of the market they're not serving."

Founder and general manager Andre Durand talks even more expansively about Jabber's potential. He believes the 13-month-old division of Webb Interactive Services Inc. might even be able to force America Online to make its dominant service work with the competition.

"Within six to eight months, Jabber will exert pressure and come up under AOL," Durand said. "AOL users will want to be able to get in touch with Jabber users."

Instant messaging, or IM, lets users chat over the Internet, almost in real time because the notes skip steps e-mail messages have to traverse.

America Online's three instant messaging services -- the kind its subscribers use, the version anyone can download and a service AOL owns called ICQ -- had a total of 50.7 million users in March, while the Microsoft Network had 16.2 million and Yahoo had 11.5 million, according to Jupiter Media Metrix.

Each company runs its own proprietary instant-messaging system, which is why users of AOL's IM programs can't chat with Yahoo members, for example, unless they open a separate Yahoo account.

A handful of companies, including Jabber, have come up with instant-messaging applications that mimic the big services and let outsiders in, but AOL has repeatedly blocked them, citing its users' privacy and security.

The answer might seem simple: Get everyone to agree on an industry standard for instant messaging, just like the one for e-mail.

But AOL contends that technical issues have gotten in the way. Federal regulators overseeing AOL's merger with Time Warner gave the company time to sort those problems out rather than instantly demanding that AOL open its IM service up.

Still, spokeswoman Kathy Kiernan says AOL supports making its services work with the competitors. The company expects to begin testing a solution this summer, she says.

The competitors believe AOL has dragged its feet to preserve its domination. Yahoo, Microsoft, Excite, AT&T and some smaller messaging providers are part of a coalition called IM Unified, whose members hope to make their systems interoperable with each other's this summer. The IM Unified members hope to form a block of users AOL can't ignore.

Complicating the picture, the Internet Engineering Task Force, a coalition of experts on Web technology, also is trying to hammer out a standard for instant messaging everyone can agree on.

For the most part, Jabber is staying on the sidelines of the discussions and going about its business selling its instant-messaging application to Internet service providers and large companies. Instant messaging can help companies improve their online customer service, or let employees collaborate from different locations.

Jabber uses XML, an increasingly popular programming language that facilitates communications between computers. This gives Jabber's technology potential uses far beyond instant messaging. Servers from different companies could transmit all kinds of information, including voice or video transmissions.

Among Jabber's customers is Re/Max International Inc. The Denver-based network of real estate agents recently switched over from a Microsoft-based IM system because it could not handle enough traffic, according to Kristi Graning, Re/Max's vice president for Web services.

Jabber executives say they have bigger deals all but lined up over the next few months, each worth $250,000 to $1.5 million.

Lydia Loizides, an analyst at Jupiter Media Metrix who follows instant messaging, said most IM providers have yet to capitalize on business applications. Jabber.com should be attractive to companies watching their budgets because an open-source program is far less expensive to deploy and maintain than proprietary systems, she said.

"There is a sweet spot that I think people are kind of starting to eye," Loizides said. "I think (Jabber) may be well-positioned to go in early and get some good accounts."

Ken Dulaney, vice president of mobile computing at Gartner Inc., was less optimistic about Jabber's chances, given that the bigger companies could soon move into the space.

"It seems to be tough for me to see a way they'd be successful long term," he said. "Microsoft is going to be all over instant messaging."

Jabber executives realize they can't fly under the big shots' radar forever. But they are confident enough that they're trying to raise about $10 million from outside investors, in hopes of gaining independence from Webb Interactive.

"A thousand decisions in three or four years will determine whether we'll be a top three or four player," Durand said. "I have a sense we are in a window of opportunity."

On the Net:

Jabber.com Inc.: http://www.jabber.com

Jabber's site for open-source developers http://www.jabber.org

Coalition of AOL competitors: http://www.imunified.org