San Francisco — Barely days after separating from corporate company Time Warner, AOL Inc. is negotiating to sell its ICQ instant-messaging service to Russian Internet-investment Russian firm, Digital Sky Technologies, is best known for its $200 million stake in Facebook, according to people familiar with the matter.
Quoting unnamed sources, the Wall Street Journal said that talks between AOL and the conspicuous Facebook investor are still in the early stages, and AOL has reached out to other parties as well, according to a person familiar with the talks. The sources said that AOL could fetch somewhere between $200 million and $300 million from the sale.
The move reflects one of the first major action from AOL’s new chief executive, Tim Armstrong, who just guided the company through a spinoff from Time Warner. AOL bought ICQ’s parent firm, Mirabilis, in 1998 for $287 million and other payments worth up to $120 million.
Digital Sky Technology, operated by Russian Internet investor Yuri Milner, owns stakes in a number of Russian Internet properties, including Russia’s largest Web site, Mail.ru, and a Polish social-networking site, but last week said that it was unifying its email service, Mail.ru, with an online game company, Astrum Online. Previously, it also acquired a $200 million stake in Facebook. The sources said that negotiations are preliminary and may not result in an immediate deal.
For those under the age of 30, ICQ was the first highly popular instant messaging client, sweeping the world well before the likes of Yahoo Messenger, MySpace, Facebook or Twitter did. ICQ has 33 million users worldwide, mostly overseas, according to market researcher comScore. In the U.S., however, AOL’s own instant messenger service is the top chat software.
Lately, ICQ has been obscured by other instant-messaging services in the U.S., but it remains popular overseas. In October, ICQ’s largest markets were Germany, with 12.6 million unique visitors, and Russia, with 8.4 million unique visitors, according to research firm comScore.
As described in the headline, many would be delighted to discover that it still exists. However, the ICQ.com site does have an Alexa rank of 299, although notably its rank comes primarily from Eastern Europe, particularly Slovakia, The Czech Republic, Russia, Israel, Ukraine, Belarus and Bulgaria, making it a nice fit for a Russian company. It only just scrapes into the top 2,000 in the United States (1,915).
Armstrong is trying to sustain AOL’s double-digit-percentage declines in subscription and advertising revenues as well as drop-offs in traffic to its sites and services, which include the AOL.com home page, e-mail, instant messaging and mapping site MapQuest. He expects to refurbish AOL on becoming a top producer of digital news, information, entertainment and other content, while maintaining AOL’s traditional presence in e-mail and instant messaging.
Armstrong, recently stated that the company is divesting itself of businesses that does not make sense as it attempts to transform itself into a premier content provider. Also on the block could be second-tier social-networking site Bebo, which AOL acquired for $850 million last year, according to a person familiar with the situation.