Smart Business from MSN

As a long-time advocate for building communities and loyalty through message boards and chat, I do acknowledge the inherant risks and dangers associated with such endeavors. MSN has announced that it is shutting down its popular chat service, and I have to say it’s a smart move.

While live chat can do wonders in certain areas (like building loyalty or providing customer service), it is virtually impossible to effectively police. The lack of such policing can result in everything from damage to your brand name, to potential libel and slander suits, to stalkers and pedophile action. Message boards are no better, but their non-realtime nature makes them easier to monitor.

In all but a few cases, it’s just not worth it. Chat rooms become unwieldy with more than a few dozen people, and so you would need a “Super User” for, say, every 50 people. The power of the web is its ability to reach millions, not dozens. The payback usually isn’t worth it, unless those 50 people are all pre-qualified potential customers.

Yahoo and Lycos UK have both chided MSN’s decision, claiming that they can effectively police their chat rooms and have no plans to shut them down. The problem is that it just doesn’t scale well. Lycos UK claims they need 97 moderators to watch over 100,000 users.

MSN has around 4 Million users. That would mean 4,000 employees to police the grounds. At $40,000/year including benefits, deductions and taxes, that would add $160 Million/year plus overhead. For what? To provide a free service to anonymous users. I don’t think so.

Chat hungry teenagers will not go flocking to IRC or CrazyLands. The current trends push them towards Instant Messaging services like MSN Messenger, ICQ, AIM or Yahoo Messenger. New versions of these are more secure and block anonymous access, so the kids can decide who to talk to.

Microsoft won’t completely shut down the service. They plan to put it behind a pay wall. They hope that the extra step of registering and plopping down your credit card (which to date is probably the best way to remove anonymity), will scare off the riff-raff and the predators.

Ignore the critics. This one’s a pretty good strategy.


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