meebocom.jpg The browser-based instant messenger, Meebo, has new ads. Similar to Pandora’s, Meebo’s ads cover unused screen space and let users add background themes, listen to music and watch videos.

The move is a first step towards monetizing like Pandora, which has used branded ads for over a year. Video ads in Meebo Rooms are a second revenue source. Launched in May, Rooms gets 15 million messages back and forth each day, equal to 11.9% of all messages including IM’s. Building out Pandora-style ads is a start, and Meebo could benefit from innovating and taking advantage of their large user base. Although web chat competitors have sprung up, Meebo has tripled usage in the last year thanks to building a strong product. Even with rapid growth, competitors like Trillian Astra are lurking, so over time what will be the differentiator?

Already, the interactive Meebo ads are a primitive form of third-party applications. I think that Meebo should take the next step to building differentiation by making a “Meebo Platform.” Easily installable applications could be built by developers for Meebo’s 7.65 million monthly users who are spending 60-70 minutes per login, according to the company. The applications could take Meebo window space, much of which is unused. This could drive user growth and create a sustainable competitive advantage by engaging users with app’s unique to Meebo. Engagement means users are less likely to switch and Meebo becomes more than IM.

If I had to pick a specific subset of apps that would fit most naturally for Meebo, I would pick casual games. An advantage of the Meebo Platform is that “presence” of knowing which of your friends are online is built into the service, which enables real-time game play. Casual games could give way to more complex, sophisticated gameplay and substantial games businesses could be built.

But why would Meebo users adopt games when some casual games sites already have built-in IM? Casual games sites are constrained to IM within their communities, whereas Meebo taps into IM networks with hundreds of millions of users. The switching cost for non-Meebo users to use Meebo games is low because Meebo offers similar features as the IM clients. Spontaneous game play could occur on Meebo Platform, whereas standalone casual games sites rely on users to coordinate with friends or play with strangers. With a platform, and in particular with a rich set of games, some users might depend on Meebo even more for the game play and other applications than just for instant messaging. An engaging platform gives Meebo more leverage in negotiating with IM networks. Meebo could build a sustainable competitive advantage over other IM aggregators because engaging applications make Meebo more than just chat. With higher engagement comes more business model opportunities. Given a way to get more out just IM’ing on Meebo, why would you switch then? The Pandora-style ads provide a way to monetize higher user engagement coming from a Meebo Platform.


(image from TechCrunch) 

Disclosure: Doug Sherrets works for TrialPay.  Trillian is a TrialPay customer.

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