In the early days of instant-messaging, ICQ dominated. They had a huge user-base for the period, luring even more in with a rapidly evolving application featuring a market-leading array of features and functions (despite the fact that they had one of the most polluted websites on the net. Worse than even Excite after they went all crazy. Trying to find the latest release or how to reset a password, among any other normal use, was an exercise in seemingly intentional obstructionism).
I used ICQ. Everyone I knew used ICQ. IM was pretty much synonymous with ICQ.
While the people behind ICQ were guilty of forever calling it a beta (a product in wide “production” use is not a beta regardless of any exculpatory, defeatist-shrug labels are affixed to it, and that misnomer needs to be eradicated. At least Flickr made light of it by calling their production a Gamma version), it was very usable, relatively lightweight, and earned its position in the marketplace. It also allowed offline messages since early on, which is a feature that some IM networks still don’t offer (usually under the premise that offline messages should be facilitated by email, which would be similar to email refusing to send a message if the recipient is available, forcing you to phone when that option is available).
As ICQ took the market by hold, paranoia was rampant that ICQ was just about to start charging for the client, or per message, or that it’d become infested by pop-up ads, and so on. It just didn’t seem to make sense that they offered so much with no obvious revenue model.
Then they were bought out by AOL for a, at the time, staggering $287 million dollars ($410 million if performance hit targets), proving that they had a brilliant revenue model after all.
Some users stuck with ICQ, or they migrated to AOL’s client, but more still simply took the opportunity to investigate alternatives, many moving to MSN. AOL of course was already growing their own userbase, obviously catapulting off of their captive audience (similar to what Microsoft did with Windows Messenger)
I now mostly use Miranda IM or Gaim, connecting to several IM networks, and the majority of users who used to appear in the ICQ list now appear in the MSN list, with only a very tiny number of holdouts. I’ve never heard a later newcomer to the IM field mention ICQ, much less even know what it is or was.
While ICQ still technically exists under the umbrella of AOL, it’s a small and relatively inconsequential niche considering its early complete and utter dominance. Perhaps such a fate was inevitable against competitors who could “cross-sell” IM with one of their other products (be it the operating system or the ISP), and the $400+ million dollar bounty was a lucrative cash-out.