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October 24, 2005
As Teens Abandon IM, What's Left?

Forrester recently issued a report confirming what many of us have suspected for some time: Instant messaging isn't the cool thing that it used to be and there is no loyalty among users.

The last statement is rather obvious because loyalty has never been a major part of the strategy. You can't have closed networks and expect users to play on your turf exclusively. Imagine where the mobile handset market would be if you could only talk to in-network users. Microsoft and Yahoo have decided that the benefits of a controlled community of users tied to their own portals don't outweigh the market penetration they might achieve with a more open approach. Good for them. Forrester also expects AOL to follow on their heels. Why, because as Forrester's survey pointed out, there is little correlation between IM preference and portal preference.

But the bigger problem for IM is that it is heavily dependent on the under-25 market. IM penetration among adults 25 and older has been declining steadily since 2003 according to Forrester. And the researcher found that the older those teens and young adults get, the more IM clients they are likely to use. No surprise there. As their world expands, so does their circle of contacts.

Market researchers have to love teenagers—they're such group animals that when you see about a dozen of them latch onto something, you can easily project that to about 6 million of their peers. The problem with a teenage phenomenon, however, is that it's short lived. They're just too fickle. And that spells big trouble for IM.

Even though Forrester counts 83 percent of the online youth (12-21) today as IM users, there is cause for concern. I'm willing to bet that most from that sample also have e-mail accounts. And I'm also will to bet that the amount of time this group spends using e-mail has dropped off as its IM usage increased. Why? Because I have anecdotal evidence, which is as good as gold for this market segment. I have teens (18 and 16) and they spend very little time in e-mail anymore. Why? Because there is just too much crap flowing into their inboxes that they choose not to deal with it.

Teens have less than zero tolerance for spam and phishing. They lose interest in a medium where only 10 percent of their messages are worth looking at. But they love to message, so they find alternatives and move as a pack to the best one. For several years now, that's been IM, but unless the industry can do something about the spim and viral attacks that are beginning to plague IM networks, the young market will move elsewhere. And it will happen quickly.

The problem with market share and penetration numbers is that they don't describe usage. My kids already spend much less time in IM sessions, but they haven't reduced their messaging. They and their friends have shifted more to SMS sessions on their handsets. They no longer repair to their computers for several-hour IM sessions after dinner when they know the rest of their friends will be online; they have conversations throughout the day in an environment that, so far, has been free of all the junk and malware (yes, I know that could be changing, too) They haven't eliminated IM, just as they haven't eliminated e-mail, but it's not the cool thing that was demanding all their attention.

Going forward, the picture could be bleak unless IM providers can do something to lure this key group back. These young people will soon enter the workforce with a different notion of what is an acceptable communication environment. Today, e-mail is something they check once in a while, just in case, and then it's an exercise in how to use the delete key. But IM isn't a store-and-forward medium (unless you're archiving for regulatory reasons) so what's to keep them coming back?

Posted by Mitch Irsfeld at 02:07 PM | Permalink

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