ActiveBuddy Morphs Into Conversagent

Christopher Saunders

December 29, 2003

ActiveBuddy, a leader in the field of instant messaging-based “bots,” is changing its name to Conversagent, to better reflect a new focus.

The New York-based firm, which markets bots, chat-based interactive agents, and the servers that power them for internal business and business-to-consumer use, said the branding change comes as it seeks to position itself as a provider of Web-based chat applications — and reduce its brand reliance on instant messaging. That’s a major change for a probably best known as the creator of the phenomenally successful SmarterChild consumer IM bot.

“We’re making our hay in more Web-based stuff,” said Chief Executive Stephen Klein. “That’s where we’re making our revenue, in more external, company-to-consumer work.”

Klein said having a corporate brand that was tied to instant messaging limited its sales efforts because most of its target market has yet to fully understand and embrace IM as a business tool.

“When you call an enterprise and you’re ’ActiveBuddy,’ when they’re concentrating on IM space, they get it,” he said. “But when they’re not, when you’re selling other stuff [such as Web-based chat interfaces,] they’re like, ’oh, that’s cute.’ … Internally, when clients pass around the product to show each other, they would much rather have a name they’re not embarrassed with.”

He added that the company still does work designing IM bots and IM bot servers, but the core of its recent new business wins has been Web-based applications — such as sales and customer support applications. Earlier this year, the company deployed a Web-based chat bot for customer service for Comcast. Other customers include Verizon.

“The IM business doesn’t pay the whole bill,” he said. “What pays the bills is the Web stuff. You go to a company with the IM stuff and they say, ’That’s really interesting, but we don’t use IM.’ Basically, we were going after 15 percent of the potential market. Now we go after 100 percent.”

Fortunately for Conversagent, much of the product development and expertise that ActiveBuddy developed in the IM arena is easily transferable to the Web space, Klein said. And despite the presence of established players in the Web chat and self-service customer support fields like LivePerson, eGain, and others, Conversagent said it’s able to compete on ease of deployment. However, it won’t be able to fight rivals with one tool it had in the IM space: ActiveBuddy’s patents on IM bots don’t apply in the Web area.

Nevertheless, the move by the firm to distance itself from IM would seem to speak a great deal about the prospects for almost any sort of customer-facing IM application. After all, ActiveBuddy was one of the pioneers in IM-based consumer marketing, launching IM bots itself or providing technology to agencies to on behalf of Keebler, Dr. Pepper/7-Up Company, and New Line Cinema.

The market’s underdevelopment has been a common lament for firms offering technology similar to Conversagent’s, which essentially serve to create conversational interfaces to enterprise apps or databases.

For some time, ActiveBuddy, Vayusphere, and newer players in the field have offered pre-built business applications — such as ActiveBuddy’s Corporate411 IM corporate directory interface — while their real business remains in licensing servers. Ideally, the firms have been hoping that the pre-built apps inspire enterprise customers to license the technology and develop their own systems. Some firms, such as Instant Technologies, have seen a measure of success emerging from the model — but few would disagree that the market remains relatively small overall.

Klein said one factor limiting growth in business-to-consumer IM is due to companies’ unfamiliarity with and uncertainty about the relatively new technology.

“I’ve been here for two years, and something I realized early on is we have these great tools, but companies aren’t ready to adopt IM,” Klein said. “Ninety percent of companies, they’re on hold. We have some companies who have started on the Web and migrated to IM, and even that, the migrations are happening slower than expected.”

Part of the problem, he added, was due to the complexities of negotiating issues surrounding the deployment IM agents across all of the major, proprietary public networks.

“The Web … [has] been around for 12 years or something,” he added. “All the moving parts are known. IM has all these other moving parts — I got to tell you, if there was one flavor of IM, it would be just ’launch-and-run.’ Instead, once [clients] get into it, it becomes a much more tangled Web than they expected.”

http://www.instantmessagingplanet.com/enterprise/article.php/3290191