By Jules

This whole affair of closing down chat rooms on MSN has raised a lot of interesting questions, and provoked some hasty responses from MSN's competitors. Why are MSN really closing down something they pioneered and made as big and popular as their chat services?

Damage limitation exercise?

There is sense in MSN’s official reason to close chat services. They have taken the view that by closing chat rooms they avoid the vehemently negative PR when paedophiles are caught soliciting in MSN chat rooms.

The 'any PR is good PR' line could be taken, but MSN cannot afford its squeaky clean brand position to be sullied in this way.

In terms of PR, closing the chat rooms is clearly a case of using a bout of bad PR to counter the possibility of absolutely horrendous PR, and that makes this a 100% valid and sensible decision.

Publicity stunt?

Saying something controversial to get your brand splashed all over the place is not beyond a publicist’s imagination, but with this announcement 50 per cent of people are liable to think of the brand negatively. For a publicity stunt, this is simply too much negativity.

Alternatively, if the announcement was just spin, it wouldn’t have been so nebulous. MSN's brand is in good stead, and it didn’t expect to arouse such passion. Hence no need to spin.

If it was a publicity stunt, it has been both successful (MSN’s brand has raised its profile in so many places) and fallen flat on its face, because the company opened itself up for attack, and has been picked on hard.

Competitors, including Freeserve and Lycos, have criticised MSN's initiative.

Freeserve’s traditional ISP business model means that  it provides access to all services to stay competitive, including IRC, Newsgroups and chat services. Freeserve chooses to moderate its own chat rooms, but the extent of its chat services has never been on the scale of MSN's. MSN were pioneers with chat – the first network to really promote online chat and get stars like Madonna talking online

Lycos has a much smaller market share in the UK than MSN, so stand to gain a lot in publicity terms by criticising its larger rival.  Lycos claims to employ a large number of moderators for its chat rooms, but given the expense that this would entail, one wonders how many of those moderators are volunteers, or based outside the UK.

Picking on MSN is easy - we all love to hate Microsoft - but in accusing MSN of risking its brand recklessly, its competitors may not have done their own brands too much good.

Commercial motives?

MSN is the child of Microsoft, and it’s no secret that Bill Gates and co. are notoriously adept in the field of market domination. As with Windows or Internet Explorer, MSN Messenger is currently engaged in bloody battle with rival applications including Yahoo!, ICQ and AOL and the open source Jabber.  Could the decision to close MSN's chat rooms be about MSN's desire to dominate the instant messenger market?

It doesn't take much to see the coincidence of shutting the chat rooms and promotion of Messenger and that’s where the sharp criticism is targeted.

Microsoft is giving Messenger a huge push in terms of advertising and promotion, with the release of the ‘fertilise your friends’ advertising campaign, and the ‘ilovemessenger’ brand, launched already in Europe and Asia, and later to be brought here in Britain. There is big money behind Messenger at the moment.

But such advertising budgets would be an initiative solely coming from Redmond. Closing chat is strictly a UK & EMEA initiative, so this is more likely to be a coincidental side effect that happens to be rather good for Messenger.

Messaging or chatting?

From a user experience perspective, there are those who believe that instant messaging (one-to-one chat) is not really chat (one-to-many chat) as it is experienced in chat rooms. But Messenger is still chat, even if it's a completely different chatting medium.

The notion that closing chat rooms will switch users to Messenger is also misguided – experienced users (including malicious ones) are more likely to use free and open Internet Relay Chat (IRC) services. Without any chat rooms to explore on a safe network, new users (including child users), just won’t chat at all.

In any case, chatters have been using instant messaging since long before Messenger existed. ICQ, the first instant messaging application, was made popular by chatters making arrangements to meet up in chat rooms!

This is not to say instant messaging is totally safe. If paedophiles do use Messenger, everyone else would be totally oblivious and invisible from their vile conversations. Messages travel from one computer directly to the other (peer-to-peer, or 'P2P'), in much the same vein as file-sharing services like Napster. In normal chat rooms, messages go via a server which logs all the conversations. With MSN Messenger, nobody logs conversations unless the users themselves do so, and that is only possible in the latest version.

The only records held on the Messenger servers are the login details, the users' profiles and their contact lists, and that can provide one method for tracing potential malice – holding the contact list online is a distinctive feature of Messenger, and is much more the exception than the rule in instant messaging application design.

A second saving grace exists, but it depends on that fickle thing, common sense. Just like needing a phone number to call someone, you need to be accepted on someone’s contact list to message someone. Children need to be told to block strangers’ instant messaging requests, just as they’re told not to give their phone numbers to them.

Economies of scale

Another problem about the commercial argument is the number of users concerned. Chat rooms are popular, but not that popular - around 1 million users. Messenger’s usage figures are several magnitudes greater, so it would hardly make a difference adding a third of chat room users to Messenger’s existing usage figures of around 15 million. And even a third is an optimistic fraction.

Chat rooms have a natural cap on their usage, as the rate of chat in popular rooms is so fast that you have to read really fast and be adept at following multiple conversations to take part. That’s hardly child’s play.

Chat rooms just didn’t scale up. They were simply not designed for the crowds that MSN could draw in.

Cost, what cost?

So did MSN decide to close down its chat rooms in order to save money? And if so, what would it save? With or without the burden of chat, moderators will still be needed to keep a watchful eye on the buzzing newsgroups and online communities. Moderators’ salaries can be justified as an insurance policy against negative political and media scrutiny

The bandwidth capacity costs that MSN uses are vast, but it more than likely pays a fixed fee for pretty much unlimited capacity. Finally the servers used for chat are already used for the communities, so nothing changes there.

In actual fact, it wouldn’t be surprising to find there is no change in cost for MSN by shutting down the services at all, so cost reduction is unlikely to be the motivation behind the decision.

It’s legitimate

So why do the chat rooms have to go? Is it for damage limitation, publicity, cost saving or business growth reasons?

It is important to note that only MSN UK & EMEA (Europe, Middle East & Africa), are closing down their chat rooms. Chat rooms are very much still alive in the US, Australia and the Far East, albeit under the subscription-only service. MSN in Europe and the UK, like the US, does not need to close down services to save money because they’re actually profitable.

Messenger’s world domination is very much on the agenda, but this is a US-led initiative and US-funded activity. Chat is not closing in the US: the closures come from MSN’s London office, not from Redmond.

A publicity stunt using chat room closure would be too risky a tactic and reason to base the publicity on. In any case, chat is one MSN’s strengths and pioneering services, so it’s clearly not a cheap trick, as some competitors have tried to paint it.

So, by a process of elimination, it would appear to be a damage limitation exercise. MSN just don’t want malicious users on their network, and they’re silencing them.

If so, this is a well balanced initiative. Not in terms of commercial success (Messenger was already on the agenda), but in terms of making MSN a genuinely decent place to be. It’s a bit wishy-washy, but it’s mostly a good move, and not bad or ugly at all.

Do you agree with this point of view? Add your comments below!