Orey Gilliam A Turaround Story

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


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


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


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


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


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


ExecutionExecution

7


Results Results –– Users Users

8

Q1/01: 23.5MM

Historical record



9

2003: 18.5MM



10

Q3/05: < 15MM



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2005: 16.5MM

The first year of growth since 2000



12

2006: 23MM



13

2007: 29MM


Results Results -- UsersUsers

14

2008: 36MM



15

Q1/09: 41MM


Results Results –– Revenue Growth (2003 Revenue Growth (2003 –– 2008)2008)

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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

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Orey Gilliam A Turaround Story

Technology

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