1. Instant Messaging Global Trends & the Russian Market
20/4/2006

2. The Phenomena
A 10 year revolution!
By billion IM accounts and roughly 495 million users worldwide
* Source: Instant Messaging market, , Radicati Group

3. IM - The Communication Leader
Amongst text mediums, IM beats as the
method of choice when talking with friends
Communication Choices IM
Text Messaging
Face to Face
Have a quick conversation with a friend that you see on a regular basis
26% 5% 7% 2%
Talk with a friend about something really serious or important 9% 6% 3% 7%
Have a private conversation with someone when you don’t want anyone else to know
18% 9% 6% 6%
* Source: Teens and Technology, Pew Internet & American Life Project, July 2005

4. Multiple Communication Tools Are The Norm For Youth
October 2005, Trends “How Youth Communicate”

5. Age Communication
On the average, youth between ages spend 10.3 hours a week in social activities outside of school, 7.8 hours of which they spend talking with friends via technology (telephone, IM, or text messaging)
Older teens (aged 15-17) are heavier users of IM (84%) compared to younger teens (aged 12-14, 65%)
While 75% of the online teens are using IM, only 42% of the online adults are exchanging IM’s
* Source: Teens and Technology, Pew Internet & American Life Project, July 2005

6. Usage Trends From an open global to a closed local community
Only 5% of the users, on an average Contact List, are from a different country
Most of the IM correspondence within a given territory is between users from that same region, most of them friends
IM Usage Research, AOL 2004

7. IM Trends in Russia
IM growth rate in Russia is even higher than Internet growth rate
IM is one of the TOP 5 Online activities in Russia (among Search, , News websites, IM and Downloads)
An IM user has 46 contacts, in average, in his IM address book
The average ICQ user uses his IM for 5 hours a day! while the average online user in Russia is online for 3-4 hours a day (in comparison, the average online user only watches TV for 1.6 hours a day, in average)
Sources: The Online Monitor - MASMI Russia (Nov - Dec 2005 Study), ICQ Analysis, ICQ Internal data, Information Technologies & Communications

8. Instant Messaging Future Trends

9. The Demographics
IM is receiving legitimation within time, and becoming more of a communication tool for adults as well
IM age demographics, 2003 & 2007
* Source: Ferris Research, Radicati, 2003

10. The Trends IM will be better positioned as intimate communication tool
IM will become a Cross Platform Communication Center, a center of communication
IM will continue to cannibalize traditional forms of communication including landline telephony and face-to-face interactions

11. The Russian Internet & IM Market
One of the world’s most growing Internet countries with expected growth rate of 30% for Internet access users*
ICQ expects that in a few years Russia will move into the group of countries with a high IM penetration, such as France and Spain
High IM penetration combined with medium to high
rate of Internet penetration
* CAGR (Compound Annual Growth Rate), Datamonitor - Industry Profiles, Russia Internet Access, June 2005

12. ICQ in Russia

13. ICQ has 13% of the Internet Users in Russia**
ICQ #1 IM in Russia
About 50% of “The Online Monitor” 2005 MASMI Study’s responders said that ICQ is their most frequently used Instant Messaging application*
ICQ has 13% of the Internet Users in Russia**
(*) Source: The Online Monitor, MASMI Russia (Nov - Dec 2005 Study).
(**) Source: Information Technologies & Communications, ICQ Internal

14. From Global to Local
ICQ is implementing the Idea of “think global, act local” and is becoming a multi-market player based on this localization strategy
Implementing the ICQ Local Strategic Partners strategy (LSP) by cooperating with local Media & Communication companies
Adopting a localization strategy that brings ICQ close to the users, partners, advertisers, and increases business opportunities

15. ICQ & Rambler

16. Rambler - ICQ Version
Rambler- ICQ Messaging Service attracted ONE MILLION users in the first 6 months
Rambler-ICQ users are highly active -50% higher than the average ICQ user - a strong and loyal community!

17. Ronen Arad, ICQ VP Product & Marketing