The Business End of IM

I have a confession to make: I'm addicted to instant messaging (IM). Fortunately, I'm not alone. Industry researcher International Data Corp. estimates that of 188 million global users of IM last year, 22 million were business users. Those numbers are expected to rise to 205 million and 37 million this year.

No wonder the bandwagon for IM gets bigger by the day. Monday, Plumtree Software (Nasdaq: PLUM) inked a deal with Yahoo! (Nasdaq: YHOO) for its Messenger chat tool. Plumtree said it would include Messenger with its suite of software products for creating corporate portals -- websites where employees and partners collaborate to get work done.

Indeed, IM is big business. As fellow Fool contributor Mark Mahorney reported last month, IBM (NYSE: IBM) is the heavy in corporate IM, with Microsoft (Nasdaq: MSFT) joining the fray not long ago, and WebEx (Nasdaq: WEBX) teaming with Yahoo! for IM-powered videoconferencing and collaboration last year. Researcher Gartner Group (NYSE: IT) predicts that by 2006, IM will replace email as workers' primary communications tool.

What's behind the rapid adoption of IM? Published reports attribute at least some of the gains to email fatigue. Literally billions of emails are sent daily, 60% of which are estimated to be spam. IM offers users a greater degree of control than email. For example, Time Warner's (NYSE: TWX) AOL Instant Messenger -- my favorite -- offers me the opportunity to block messages from anyone not on my customized "buddy list."

Unfortunately, hackers appear to have kicked down this door, too. Unsolicited commercial instant messages, often called spim, are expected to reach 1.2 billion in 2004, up from 400 million last year, according to a report by technology researcher Radicati Group. One of the evil tricks helping propagate the new electronic epidemic was profiled in a recent story in The New York Times. A user relayed how a friend who, in downloading a game, unwittingly gave permission to spim him and others on his friend's AIM buddy list.

IM is a great idea and is already reshaping business. But for real investing opportunities to arise from this industry, security experts will have to find a way to diffuse spim before it explodes in the same way as its older, uglier cousin.

Time Warner is one of David Gardner's recommendations for Motley Fool Stock Advisor . You can check it out, with a money-back guarantee, for six months.

Motley Fool contributor Tim Beyers loathes email spam and never could figure out the appeal of Hormel's all-purpose, gelatinous creation either, which yesterday was the subject of a lawsuit against the Feds. Tim doesn't own shares in any of the companies mentioned. You can view his Fool profile here.