Talk is cheap--and chat is free. But that doesn't mean that it can't be a moneymaker.
But Yahoo is entering an increasingly crowded market. A growing field of Web chat companies is competing to become the community where Netizens turn. Why? The promise of fat revenues from advertising. But profits remain elusive for most, including America Online (AOL), which has been a model for online chat sites.
Microsoft Network also is making chat--complete with comic icons--a central part of its newly revamped service.
The Web also is dotted with sources such as Internet Relay Chat, a stand-alone network for online communication. But for newbies and mainstream Net users, Web-based sites that make chat easy and provide hosts that watch over the chats are generally more attractive.
But just providing the technology doesn't cut it anymore. In order to be successful, chat has to part of a larger online community, said Peter Krasilovsky, vice president for Arlen Communications. People need to be given topics of conversation, he added.
That's why Yahoo is providing moderated chat rooms, as well as allowing users to create their own rooms. Some examples: Arts and entertainment, business and economy, computers and the Internet.
That's the same formula other companies are using. Among them is WebChat Broadcasting System, or WBS.
WBS began a year and a half ago as an "edutainment" company and put its chat interface on the Web to test it, said Bayard Winthrop, vice president of sales and marketing. "As time went along, we realized the Web site was where the true value was," he said.
As of March, WBS began focusing solely on the chat site and now boasts nearly a million members and a rapid growth curve.
Winthrop explains the phenomenon: "A community began to form," he said. "Chat is really not about chat," he said. "It is really about community and socialization."
Jeff Mallet, senior vice president of business operations at Yahoo, agrees. He sees chat as one component of Yahoo's community-building effort.
"We felt that the chat service for the Yahoo community is long overdue," Mallet said.
But others warn that chat is not a panacea.
Howard Rheingold, Net celebrity and creator of Electric Minds, agreed that people "always need to communicate with each other."
But, he added, chat is only one way to do it. Electric Minds provides a communication interface through bulletin boards, a form of communication that is a bit more permanent. "Chat is ephemeral," he said.
Maria Wilhelm, president of The WELL, one of the founders of virtual community, added "chat is only one part of the spectrum of communication."