IM poised to become instant information tool

The new buddy won't be real. It will be a "bot" created by New York company ActiveBuddy, which is developing technology that lets popular software for trading short text messages be used to grab information stored on Web sites and computer databases.

Rather than visiting a Web site for stock market information, for example, a person could send an instant message with the text "IBM stock" and instantly receive a response with the current price of IBM shares.

An early version of the technology is already quietly living inside AOL Time Warner, Microsoft and Yahoo chat networks, providing movie schedules, stock quotes, and news headlines. It also can search for dictionary terms or answer math questions.

Although it's still new, the service holds the potential to expand consumers' ideas of the possibilities far beyond the traditional Internet. It could even increase use of an IM service--for example, AOL Instant Messenger--as it siphons traffic from popular Web portals.

At the least, it will change people's view of the lowly chat window.

"This opens up some areas (for the Net) that really haven't been explored," said Michael Pazzani, a University of California at Irvine computer science professor who studies interactive technologies and also heads a company focusing on personalized information. "This opens up a lot of possibilities."

ActiveBuddy's data application is just the latest twist in the development of instant messaging, which is slowly evolving from an informal chat network into software with the ability to support many applications for both consumer and corporate uses.

Underground programmers have harnessed AIM as a way to swap free music and other media files through a program called Aimster. Microsoft, meanwhile, is leaning heavily on the technology in its .Net software-as-a-service strategy. The company is using instant messaging in a new set of software building blocks grouped under the code name HailStorm, which is being billed as a way for consumers and business customers to access their data--calendars, phone books, address lists--from any location on any device.

Despite its successes, however, instant messaging has been hampered by a lack of standards and nagging questions about its true commercial potential.

AOL Time Warner's AIM and ICQ services do not work with each other or rival offerings such as Microsoft's MSN Messenger and Yahoo Messenger, forcing a battle over interoperability that could slow the development of new features such as ActiveBuddy's data bots. In addition, while almost everyone wants a piece of the IM market, no one has yet figured out a way to generate significant revenues from the technology in its current form.

Old robots in new houses
ActiveBuddy is putting a new twist on an old idea of bots or "intelligent agents"--small pieces of software that can act more or less independently of direct human control. The service meshes the "chatterbots" that have populated the Net for decades, badly mimicking human conversation, with the database searching functions of an ordinary portal such as Yahoo's My Yahoo service.

One of the earliest and best known of these "chatterbots" was named Eliza, replicating the often-maddening responses of a psychologist to a patient. Responding to questions and conversation with new questions of "her" own, even this rudimentary bot was able to fool many people online into thinking that "she" was a real person.

ActiveBuddy's technology doesn't go nearly this far in trying to mimic human responses. Instead it has joined with a lineage of software such as Atomica (formerly GuruNet), Octopus and Copernic that have tried--with only marginal success--to allow people to gather information from multiple places on the Net without having to visit Web sites.

Automatic chat services and quick information tools haven't gained much traction in the past. But combining the two strategies inside instant messaging, which is already familiar to tens of millions of people, could prove the breakthrough that the two worlds have lacked separately.

To consumers, the ActiveBuddy tool appears as just another name on a "buddy" list of one of the various IM providers. But on the other end of the buddy is a computer rather than a person.

ActiveBuddy, backed by Reuters and Wit SoundView Ventures, has developed a natural language search called "buddy script." This script can communicate with various content databases, such as Reuters, to pull up answers on topics at lightning speed. For a question such as "What's the weather?" the application will request a ZIP code, then provide the local forecast by tapping a weather database. The answer is then sent back to the message box--instantly in a recent test of the service by CNET News.com.

"There are certain kinds of information that you just don't need HTML and a four-color Web page...to communicate to you," said ActiveBuddy CEO Peter Levitan. "This is an alternative way to get to information faster."

Rumor-spreading robots
The bot living inside the chat networks today is already serving as a deal-maker for a major record label and its start-up parent.

ActiveBuddy is conducting a nonpublic test of its service, using a secret "buddy" name that has been passed around by word of mouth since November. The code name fell into the hands of executives at Capital Records, who liked the service well enough that they decided to test it as a promotional tool.

ActiveBuddy and Capitol are now building the first "activebuddy" to market the launch of a new record from rock band Radiohead, due out June 5. The buddy, which sits on a chat program's friend list, will let fans pull up fast answers on the band's tour dates, song lists and bios, among other tidbits.

"A friend had passed (the name) onto a friend at Capitol, and when the right band came along, we signed a deal," Levitan said.

A broader release of the service is planned for June, shortly after the Radiohead service appears inside buddy lists. The company is working out just how it will make money from the technology, however.

ActiveBuddy plans to partner with or license its technology to companies such as Capitol wanting to reach consumers. Gauging the cost of such deals is "like asking someone how much it costs to build a Web site," Levitan said, adding that it could be in the neighborhood of a couple hundred of thousands of dollars. The price all depends on how complex the buddy is, how many people use it, and the costs associated with running it on the various networks.

Levitan also envisions Ford Motor and General Motors wanting to build bots capable of answering questions related to their cars. Other huge potential lies in the enterprise market, hooking up corporate intranets or sales forces to interactive agents. Real estate agents, for example, could call up information from a wireless device by using a corporate buddy.

Although the market for such services is unproven, several companies are working on similar technologies. Significantly, IBM already uses a tool called "Buddy Bots" internally that allows employees to tap into company databases through an IM interface. Companies such as NativeMinds also provide automated responses for customer support requests.

But creating cool technology and a successful business are not the same thing, and previous efforts to streamline the Web interface have been slow to offer clear revenue opportunities. Atomica, for example, which offers an elegant tool for finding information without calling up Web pages, changed its name last year and abandoned its consumer strategy in favor of a business-to-business model.

Last month, the company released Atomica Pro, a product aimed squarely at the corporate enterprise market.

The coming IM arms race?
Still, perhaps most threatening is the prospect of the IM companies building their own bots to expand their networks far beyond the world of chat.

"Nothing would stop them from doing this," said Bob Zurek, an analyst at Forrester Research. "If they see the potential of instant messaging interacting with an automated expert, they could obviously put all their relationships (to use) to serve up this kind of information. ActiveBuddy has to build all that."

For its part, ActiveBuddy has patents pending. And Levitan says he isn't worried. "Yes, they could do it on their own. Could they beat us on it? I don't think so."

The company is also in talks to secure the rights to sell interactive agents directly into one of the IM companies' networks. So far, the company has built interfaces to work with the major IM networks while they test the service, although it only works with PCs so far.

In the meantime, the company and other developers are exploring new ways to turn IM from a chat box into something that rivals the power of the Web itself.

"There will be situations," said Forrester's Zurek, "where consumers will use instant messaging instead of their browser."