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 The Big Picture BUILDER.COM

Fredric Paul

The business of chat

I have a confession to make: I don't chat. At least, I don't chat online. Lots of people do, though; chat is one of the most popular online activities.

But the conventional wisdom holds that chat sites are home to teenagers practicing their cussing; middle-aged men pretending to be blonde nymphets; and myriad other manners of pointless conversation. That's probably why chat sites have had such a hard time supporting themselves by selling advertising. Most advertisers apparently aren't interested in displaying their wares amid such silliness.

Chat sites have had a hard time supporting themselves.
  Now, some chat proponents are trying to change the rules by pitching chat to big corporations as a serious business tool. Instead of just a lowest-common-denominator traffic generator, business chat is designed to bring customers closer to vendors--and to each other--for sales pitches, product demonstrations, and information sharing. Chat is also being sold as a way to bring employees together on corporate intranets--for customer service, help desks, training, and similar purposes.

At the recent Internet Summit held by giant Web developer USWeb at its Santa Clara, California, headquarters, I met with representatives of technology wholesaler Ingram Micro, who are already using chat on a new corporate extranet.

Ingram's Venture Tech Network includes a series of chat rooms established to let small resellers share their successes and failures. More than 130 companies have paid to join the Venture Tech Network, and some 40 to 50 of them gather online every Friday afternoon to create a community and post information about suppliers.  
Proponents are trying to pitch chat to big corporations as a serious business tool.

In addition to chat rooms, the Venture Tech Network features a series of bulletin board areas covering various topics of interest to resellers. Users can also send instant messages to each other.

USWeb partner Dan Kempke says feedback from the resellers has been very positive. "We went out thinking that BBS was where the action was," Kempke recalls, "so we were surprised to see less interest in the BBS. We've seen more interest in the chat."

Business chat is designed to bring customers closer to vendors, and to each other.
  USWeb had some experience building chat rooms. About a year and a half ago, it put together Stork Site, a chat-equipped resource for expectant parents. Now, with the success of the Venture Tech Network, Kempke says USWeb is trying to replicate chat solutions for other clients.

According to Ingram's Josh Kaplan, at least two other business units in the company want to add chat capability--possibly including USWeb's video-based SiteCast technology.

Despite these promising signs, the list of companies seriously using chat is still small--reportedly including such firms as Merrill-Lynch, Adobe, and switch-maker Fore Systems. Egghead Software, meanwhile, is facilitating its move to Web retailing using 3D chat technology from The Palace to set up virtual storefronts.  
Despite promising signs, the list of companies seriously using chat is still small.

But even some high-profile chat converts are still concentrating on lightweight sessions instead of down-and-dirty business applications. To me, it seems like the market is being driven primarily by chat software vendors looking to expand their markets.

Companies such as The Palace, eShare, Well Engaged, iChat, and others are frustrated by the high-volume chat sites' inability to turn a profit, so they're prospecting for new customers.

Chat on corporate Web sites is clearly still an experiment.
  For many companies, community is important--that's why BUILDER.COM built the Builder Buzz--but I'm still not convinced that business is chat's killer application. Many firms are justifiably uncomfortable with situations where they don't fully control the content on their Web sites. Performance also remains a concern. Chat on corporate Web sites is clearly still an experiment, not a mainstream business practice.

As for me, I don't waste my time chatting online about frivolous things--I prefer to do that in person. I'm not really interested in chatting online to buy something, either, much less to find out what's wrong with my computer. I love the Web, but if I know the person to whom I'm talking, or even if I just know how to reach them, I'd rather pick up the telephone.

Read more from Fredric Paul

Fredric Paul is editor for CNET

Does chat have a serious business application?
Join the conversation in Builder Buzz

Related stories:
 • Adding chat to your Web site
 • Build an online community

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