AOL Upgrades ICQ

America Online has given its ICQ instant messaging service a significant revamping, including allowing developers to extend it with plug-in applications, and is moving toward combining the Lite and Pro versions.

ICQ 4.0, available now, features a development platform called Xtraz that has an open application programming interface (API). This supports creation, delivery, and automatic update of plug-in applications developed in HTML, Dynamic HTML, and Macromedia Flash, says Ronen Arad, ICQ director of product management.

With this version, AOL is also shifting its emphasis to ICQ Lite, a slimmer version of the messaging software originally introduced in 2002. ICQ 4.0 is based on ICQ Lite, with the smaller footprint of 2.5MB, according to Krista Thomas, an AOL spokesperson. The ICQ Pro 4.0 version does not support Xtraz and is being merged into this version, according to the company.

Selection of Xtraz

Some Xtraz immediately available include several games for both single and multiple users, a greeting-card sender, and a feature for uploading photos. Expected later this year are video sessions, more games, maps and personal finance plug-ins.

The Xtraz applications reside on ICQ servers, so AOL can automatically deliver and update them without users having to do any downloads, Arad says. Initially, ICQ will work with partners to create Xtraz plug-in applications. Later, users will be invited to develop applications and submit them to AOL, which can make them generally available, he says. Arad calls the approach "pioneering in terms of its innovation."

The introduction of an open development platform to create instant messaging applications is unique in the market, confirm analysts Michael Osterman, principal of Osterman Research, and Genelle Hung of The Radicati Group, in separate interviews.

AOL expects the Xtraz platform to attract new users drawn by the new functionality and to increase revenue as ICQ and its partners monetize the new services, AOL's Arad says.

ICQ currently has 8 million active users every day on its network, and it is strongest outside the U.S., Arad says, adding that 80 percent of ICQ users aren't English speakers. With ICQ 4.0, the idea is to maintain the service's international strength and increase its position in the U.S., Arad adds.

"I think with this release we're positioning ourselves to create a huge marketplace here in the U.S.," he says. Since last year, users from ICQ and AOL's sister AIM instant messaging service have been able to exchange messages, which gives ICQ access to the AIM installed base.

The Messaging Market

ICQ ranks fourth in terms of use behind AOL's AIM, Microsoft's MSN Messenger, and Yahoo's Messenger, but it isn't by any means a wilting service, Osterman says.

"ICQ is in a very solid fourth position," he says. As the other three services extend to the enterprise market, ICQ seems to be positioning itself as a purely consumer-oriented service, Osterman says.

Other enhancements in ICQ 4.0 include a revamped user interface, called Super Message, which consolidates operations into a single window, simplifying the user experience; a feature called Follow Me that lets users forward their ICQ messages to a cell phone; and integration with the ICQ Universe social networking service launched in March.

"This is a very significant upgrade. It exceeded my expectations," Radicati's Hung says. "The interface looks wonderful. Everything is tightly integrated and easy to use. They have done a lot of research into what users want."

"The Xtraz platform is pretty unique. Through it, they're making ICQ more of a framework for application development," Osterman says.

ICQ 4.0 is now available as a free download in its English-language version. Versions in German, Portuguese, Spanish, and traditional and simplified Chinese will follow soon after, Arad says. Xtraz applications are also free for end users, Arad says.

Laura Blackwell of PC World contributed to this report.