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Why does there always have to be a catch?
E*Trade's (NYSE: ET) 
recently announced
agreement to deliver
streaming financial data and trading access through
Yahoo's (Nasdaq: YHOO) instant messaging (IM)
technology shows refreshing promise and optimism.
A technophile at heart, I immediately began to imagine IM-based e-commerce scenarios that would revolutionize business and consumer e-commerce.
But wait a minute. Haven't we been down this road before?
In order for IM to graduate from electronic chitchat to e-commerce, it first must close its egregious security gaps.
Instant Gratification
Prevailing consensus indicates that IM -- which currently boasts 200 million users worldwide -- could become the next "killer app."
By 2003, research firm Gartner (NYSE: IT) said, 70 percent of enterprises will employ
workers who use IM services.
And by 2005, instant messaging will surpass e-mail as the primary way in which consumers interact electronically, according to Gartner. In addition, IM will be integrated into 50 percent of businesses' customer-interaction applications.
Research firm IDC has estimated that by 2004, nearly 2
trillion instant messages will be sent annually.
Unfulfilled Promise
E*Trade and Yahoo! are to be applauded for trying to harness and monetize this technology's burgeoning user base.
IM's immediacy holds promise for real-time cross-enterprise collaboration, telephone-quality customer service, and streamlined portable e-commerce applications.
But for the same reason that much-hyped Web services could stall, consumers and businesses will not conduct business over IM until concerns about the security flaws inherent in real-time connectivity are assuaged.
IM market share leader AOL Time Warner (NYSE: AOL)
undoubtedly would agree. Earlier this year, the
company discovered a "buffer-overflow" vulnerability
in its AOL Instant Messenger product that could have allowed
hackers to take control of desktop computers and
cripple entire corporations with worms and viruses.
On January 3rd, AOL Time Warner claimed it had repaired the glitch.
Dangerous Communication
The problem with IM is that it relies on insecure communication protocols that cannot be policed by traditional firewalls and gateways.
What is more, it is difficult to scan files for viruses attached to IM messages.
Not surprisingly, some analysts are pushing for enterprise-class versions of IM technology that have tighter security provisions.
Perhaps an industrial-strength version of Microsoft's (Nasdaq: MSFT) Microsoft (Nasdaq: MSFT) Corp">
MSN Messenger would have prevented the
worldwide propagation of the
"Cool Worm" virus on
February 14th.
That virus spread by sending itself to other IM users on victims' "buddy lists."
Delayed Response
Even though comparatively impervious security measures underpin most Web-based e-commerce applications, consumers and corporations still balk at making transactions online for fear of malicious intrusion.
IM, which lacks those fundamental security mechanisms, is beginning to look like a hacker's playground.
To make matters worse, major IM providers Microsoft, AOL Time Warner, ICQ and Yahoo! have often responded sluggishly to security breaches, repeatedly drawing fire from security advocates.
For example, Microsoft took two months to issue a patch for the MSN Messenger vulnerability exploited by the Cool Worm virus.
Repeated Mistakes
I fear that IM will never reach its potential in the
e-commerce arena as long as its evolution continues
to emulate that of e-mail 
.
According to research firm IDC, more than 10 years of business e-mail use passed before enterprises began to address related security problems.
Real-time connectivity between consumers and businesses could be a gold mine.
Unfortunately, there is always a catch.
What do you think? Let's talk about it.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.
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