Download - ICQ - A Turnaround Story
ICQ – A Turnaround Story
A Turnaround StoryTurning a Killer Application into a Growing and Profitable Business
Orey GilliamFormer Head of AOL Messaging and CEO of ICQ
ICQ – A Turnaround Story
The Good and the Bad – End 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 – Think 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 territories
ICQ – A Turnaround Story
Strategy 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 Communication companies in
strong ICQ territories
ICQ – A Turnaround Story
Implementation Challenges – Partners
• 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 – Organization
• “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
Execution
7
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
8
Q1/01: 23.5MMHistorical record
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
9
2003: 18.5MM
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
10
Q3/05: < 15MM
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
11
2005: 16.5MMThe first year of growth since 2000
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
12
2006: 23MM
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
13
2007: 29MM
ICQ – A Turnaround Story
Results - Users1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
14
2008: 36MM
ICQ – A Turnaround Story
Results – Users 1/
Jun/
98
1/De
c/98
1/Ju
n/99
1/De
c/99
1/Ju
n/00
1/De
c/00
1/Ju
n/01
1/De
c/01
1/Ju
n/02
1/De
c/02
1/Ju
n/03
1/De
c/03
1/Ju
n/04
1/De
c/04
1/Ju
n/05
1/De
c/05
1/Ju
n/06
1/De
c/06
1/Ju
n/07
1/De
c/07
1/Ju
n/08
1/De
c/08
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
15
Q1/09: 41MM
ICQ – A Turnaround Story
Results – Revenue Growth (2003 – 2008)
2003 2004 2005 2006 2007 2008$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
ICQ Direct Revenue
16
ICQ – A Turnaround Story
Strategy vs. On-Going 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