TECHNOLOGY

AOL Instant Messenger Shuts Down – What Comes Next?

The AOL era ended long ago, but AOL Instant Messenger officially announced it’s shutting down this week. Tech companies and entrepreneurs would do well to learn form its decline.

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BY Alex Moazed - 09 Oct 2017

PHOTO CREDIT: Getty Images

AOL Instant Messenger, known colloquially as AIM, announced its intention to shut down this week after 20 years of operation.

AIM was the dominant messaging platform through the 1990s and much of the early 2000s. It was the Snapchat of its day, favored by teens as the dominant way to connect online.

While the downfall of AOL is a much larger story, AIM's decline began with the advent of social networks like Facebook, which soon became the primary means of social connection. However, it wasn't until smartphones took off that AIM truly drifted to cultural irrelevance.

With the smartphone came messaging apps like WhatsApp, Facebook Messenger, Snapchat and WeChat.

In China too, there was a similar shift between desktop and mobile. Tencent, creator of China's most popular messaging app, WeChat, was also the creator of QQ. This was a messaging app modeled after AIM and IRC, another chat client more popular among gamers and tech-savvy users.

While QQ still survives today, it was long ago surpassed by WeChat as the dominant messaging app in China. Like with AIM, QQ was the dominant desktop messaging app. But as users shifted from desktop to mobile, the mobile device as a development platform opened the door to many new kinds of businesses. Mobile chat has been among the most successful, but there have also been big shifts in everything from transportation and travel (Uber, Airbnb) to entertainment and media (Snapchat).

Like WeChat and WhatsApp, these mobile-first businesses wouldn't have thrived without a new development platform built around a new kind of hardware.

So as AIM rides off into the sunset, the real question that it's disappearance provokes is: what comes next?

The Next Big Thing

Much like the shift from desktop to mobile, the shift from desktop to mobile, the shift to the next big development platform will enable the launching of many new businesses. Some of these will be in entirely new industries that didn't exist before, but many will be supplanting or competing with industries that already exist today.

Some businesses will manage this transition well, much the way Facebook successfully navigated the transition from desktop to mobile. But many more will likely fade away slowly as new competitors arise and consumer behaviors shift.

Many signs point to us nearing the end of the mobile wave of innovation. The latest releases of the iPhone and competing Android devices hardly have the "wow" factor that earlier upgrades offered. We've likely reached the point of mostly incremental upgrades with little on offer that is truly new.

With that lack of hardware innovation comes a decline in new consumer-facing businesses.

Most of the big businesses built on mobile were launched a few years ago or more. And most of these were successful because they capitalized on new sensors and new data in new ways. Think of how Uber was built on the GPS sensor in your phone, as one example, or how Snapchat was built on the camera as another.

As I've written before, for tech innovation to continue at the pace of the last decade, we'll likely need a new dominant hardware device to emerge. So far, what exactly that will be is unclear.

The most likely contenders seem to be a mix of AR/VR, automotive and autonomous vehicles, IOT, and blockchain. But none of these sectors have yet found traction with consumers. It might well be that we're unlikely to see a new innovation with the same scale as the smartphone within the next few years. That would be bad news for tech companies and entrepreneurs.

Either way, they'd do well to heed the lessons from AIM's decline. Getting this shift right will be the key to staying relevant with consumers for the next decade or more. Get it wrong, and you could be the next AIM and AOL, slowly fading from relevance as technology and consumers move past you.