Date post: | 21-Jun-2015 |
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ICQ – A Turnaround Story
A TurnaroundA Turnaround StoryStoryTurning a Killer Application into a Growing and Profitable Turning a Killer Application into a Growing and Profitable
BusinessBusiness
Orey GilliamOrey Gilliam
Former Head of AOL Messaging and CEO of ICQFormer Head of AOL Messaging and CEO of ICQ
ICQ – A Turnaround Story
The Good and the Bad The Good and the Bad –– End of 2003End of 2003
Good
• Extremely strong brand
• Considerable community in several
territories
• Desktop presence – unique value
• History of innovation – the IM
pioneers
• Superior product skills and knowledge
of the space
• Strong commitment of the
organization to the brand and the
company
• Despite a very rough year
Bad
• No active distribution• Declining user base
• Number 4 out of the four largest
global players• Fierce competition from MSN, Yahoo! and
AIM
• American product – translated but not
localized
• Very constraining budget
• No ad sales force – the major revenue
generator
• No local presence
2
ICQ – A Turnaround Story
The Strategy The Strategy –– Think Global but Act LocalThink Global but Act Local
• Viral distribution works much better with
the leaders and with little competition
• Must have local distribution
• A translated product is not a localized one
• Need a localized product with local content
and services
• Cannot close global advertising deals
• Advertising sales efforts are territory-based
• Relationship with the Mobile carriers may
be global
• Yet each local carrier has its own deal
3
Need to have local business presence in each of the target terriNeed to have local business presence in each of the target territoriestories
ICQ – A Turnaround Story
Strategy ImplementationStrategy Implementation
Give
• Co-branded ICQ client
• Access to ICQ community in
the territory
• Desktop presence
• Share revenue generated
through ICQ properties
Get
• Distribution via website
• Marketing via online and
offline properties
• Local content and services
• Access to local Mobile carriers
• Local sales force to sell ICQ’s
ad inventory
4
Form strategic partnerships with leading Media and Form strategic partnerships with leading Media and
Communication companies in strong ICQ territoriesCommunication companies in strong ICQ territories
ICQ – A Turnaround Story
Implementation Challenges Implementation Challenges –– PartnersPartners
• New deal type
• Needed to bring together various parts of the organization
• Low anticipated initial revenue
• Little attention from the partner’s CEO
• Had already been thinking about Instant Messaging and decided
not to go there
• Will ICQ beat the competition?
• IM is one of three basic services with Content and e-mail
• MSN and Yahoo! had all three
• Partner was usually bigger but MSN and Yahoo! were catching up
• Had to move the “battlefield” from IM vs. IM to Portal vs. Portal
• 9 – 12 months from lead to contract!
5
ICQ – A Turnaround Story
Implementation Challenges Implementation Challenges –– OrganizationOrganization
• “Already tried it…”
• The partners were not excited
• ICQ had to bend backwards to get the deals done
• Product and technology focus shifted to localization and
customization
• Considerable development effort to create a “cookie cutter” operation
• “Less innovation” for the end user
• More complex version management
• Less attentive partners generated animosity and frustration
• Most of the work usually was after the deal was signed
• Major Partner Relations efforts
• Focus on territories
• Territory managers responsible for revenue, users and usage numbers
6
ICQ – A Turnaround Story
ExecutionExecution
7
ICQ – A Turnaround Story
Results Results –– Users Users
8
Q1/01: 23.5MM
Historical record
ICQ – A Turnaround Story
Results Results –– Users Users
9
2003: 18.5MM
ICQ – A Turnaround Story
Results Results –– Users Users
10
Q3/05: < 15MM
ICQ – A Turnaround Story
Results Results –– Users Users
11
2005: 16.5MM
The first year of growth since 2000
ICQ – A Turnaround Story
Results Results –– Users Users
12
2006: 23MM
ICQ – A Turnaround Story
Results Results –– Users Users
13
2007: 29MM
ICQ – A Turnaround Story
Results Results -- UsersUsers
14
2008: 36MM
ICQ – A Turnaround Story
Results Results –– Users Users
15
Q1/09: 41MM
ICQ – A Turnaround Story
Results Results –– Revenue Growth (2003 Revenue Growth (2003 –– 2008)2008)
16
ICQ – A Turnaround Story
Strategy vs. OnStrategy vs. On--Going ProceedingsGoing Proceedings
• Several business ideas had been attempted
• The executed strategy was the combination of some of them
• The strategy was continuously adjusted as market conditions
became apparent through successes and failures
• Organization had to change to support the strategy
• It wasn’t always about what was done – it was often about
what was no longer done
• Major challenge with a mature company
17