The End of Email?

Man, I hate paraphrasing R.E.M., but I just can't help myself: Is it the end of email as we know it? It sure seems so.

Web news outlet Silicon.com yesterday picked up on a new IDC study that says there are roughly 1 billion instant messages (IMs) sent daily by some 28 million business users. Yes, that's right, I really said 1 billion. That's got to sound huge -- unless, of course, you're as into IM as I am.

Really. I sent more than a few IMs to Fool colleagues and editors yesterday. It's a good bet that I'll do the same today. IM is easier and more effective than email when you've got a deadline.

That's why I'm not at all surprised at IDC's numbers. Still, from a Rule Breaker investor's perspective, this is pretty exciting stuff. Think about it: There hasn't been much money yet made on IM because the market is in its nascent stages. Indeed, IDC says the total business messaging market was $315 million last year. Yet rampant growth should boost the market by more than 23% annually, to $736 million, by 2009.

IDC's report credits the growth of IM to home users who've brought the tool into work. That's made widespread acceptance of the technology all but inevitable. Microsoft (Nasdaq: MSFT  ) has tried to take advantage by making its MSN Messenger a more vital part of its Office suite of productivity software, and Google (Nasdaq: GOOG  ) , too, appears to be on the same path.

What's interesting is that the invasion of IM mirrors tech revolutions of the past. Take personal digital assistants, for example. Corporations didn't adopt them. Users just liked them, bringing their Palm (Nasdaq: PALM  ) devices into work. Research In Motion's (Nasdaq: RIMM  ) BlackBerry forged its popularity the same way. Together, Palm and Research In Motion now account for more than $13 billion in stock market value.

It's a good bet that there are companies already out there that will assume such roles in the IM market. Certainly there's Time Warner's (NYSE: TWX  ) AOL Instant Messenger to consider, and Yahoo!'s (Nasdaq: YHOO  ) IM platform. Don't discount IBM (NYSE: IBM  ) , either. Its Lotus suite has proven popular for corporate IM.

But these companies are huge, and IM is bound to be a small piece of their overall business. The best bets may still be Baby Breakers, budding Rule Breakers that have yet to take to the public markets. Most of the potentials are in security. They're hoping to plug the holes left open to hackers and scammers when instant messages get traded. Among them: Akonix, IMlogic, and WiredRed. How much of the market's growth will these firms collectively absorb? It's impossible to say at the moment, but I don't think the number will be small. Ignore these companies at your portfolio's risk.

Further Foolishness in a matter of instants:

IM. WiFi. RFID. If it's an acronym, there's a good chance David Gardner and his team of analysts are covering it forMotley Fool Rule Breakerssubscribers. The search for the next ultimate growth stock has resulted in a portfolio that's currently walloping the market by more than 10 percentage points. Get all 25 active buy reports and insights into the Next Big Thing by taking a risk-free trial today.

Palm and Time Warner are Motley Fool Stock Advisor recommendations.

Fool contributor Tim Beyers is completely addicted to IM. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has an ironclad disclosure policy.


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