As we reported it was close to doing three weeks ago (CI No 3,416), America Online Inc has gone ahead and bought Israeli internet messaging company Mirabilis Ltd. AOL is handing over $287m for the company which has built a community of 12 million people that use its ICQ instant messaging technology. In addition, over the next three year, AOL will make payments of up to $120m based on growth performance levels. Mirabilis will maintain is base in Tel Aviv and will continue to be run by its founders as a free web-based service under its own brand name. That’s being done as part of AOL’s multiple brand strategy, which has also seen it leave CompuServe as its own entity. AOL insists it will continue to develop the ICQ technology to both improve it and establish its revenue-providing capabilities. So far, AOL has no plans to offer advertising with the service, something Mirabilis has avoided and a move which might alienate the ICQ community – generally made up of young technically-savvy individuals which are a very different demographic than AOL’s core service attracts. Advertising should not be ruled out as a possibility down the road, however, according to a spokesperson. AOL says the acquisition gives it a markedly improved web presence and, since the ICQ software dashboard stays up on the user’s screen all the time, thereby offering AOL a chance to broaden its web portal strategy. It will try to leverage ICQ as a launch pad for some of its own content, although plans for that have yet to be announced. For now it will concentrate on getting out the next version of the ICQ software, ICQ98, which is said to have numerous enhancements. The current version of the software has come under fire recently over security concerns, but AOL indicated that there are no specific problem areas it will be looking to fix. Since roughly 60% of ICQ’s users are based outside the US, the acquisition also greatly increases AOL’s international presence. AOL has indicated that a substantial portion of the $287m will be taken as a charge during the current fourth-quarter, ending June 30. It doesn’t feel that the acquisition will be dilutive to operating earnings, however. AOL shares rose $1.50 to close at $84.75 on Monday.
