When AOL bought Mirabilis back in June of 1988, long-time users of its free messaging software, ICQ, were horrified. AOL, the company that had polluted the Internet with its netiquette-challenged newbies, taking over the bastion of young, techie early-adopters? It was a culture clash whose clanging was again heard loudly in November, when AOL acquired browser pioneer Netscape. Could AOL make the leap and serve sophisticated Netheads as well as it had introduced grandma to the online world? How was it going to justify spending approximately $400 million for the acquisition?

Well, we're about to find out next week, when ICQ Inc. (Mirabilis' post-acquisition moniker) introduces the first new version of its software since the acquisition. Not only will this be a test of how AOL services its new users, but it will be the first attempt by the company to turn these users into revenue streams. And much of the experimentation is happening in New York.

"We've got this thriving 27 million person community," said John Borthwick, VP of product development and programming for ICQ, "and we've got to turn it into a business." Borthwick heads a Silicon Alley team that includes some of the remnants of his Total New York Web startup, which sold to AOL in 1997.

The challenge for ICQ has never been building a user base. It had more than 12 million registered users when AOL purchased the company, and the number has grown to 27 million since. Of ICQ's 11 million active users (those who have used the service in the last 30 days), six million people use it daily, for an average of about 70 minutes. One hundred thousand copies of the software are downloaded from the ICQ website every day -- so many that the development team in Tel Aviv uses the figure as a motivational tool. It's rigged a large LCD display directly to the servers, and the number on it climbs each time the software client is downloaded.

"There are only a couple of other places that are doing these kinds of numbers in the community space," said Borthwick. "Other than AOL, there's the phone."

AOL says 83 percent of ICQ users are under 34 years old, although they don't have many more numbers to describe them (the company has a number of surveys in the field). Still, it's possible to get a pretty good idea of their interests by the self-organizing chat groups that have sprung up around the service -- Web pages with names, nicknames, ICQ numbers, and interests ranging from Quake fandom to fashion design. From looking at how these groups have organized, AOL believes it's got a young, techie, media-savvy audience.

It's a great demographic -- young, computer users likely to buy video games and gadgets. They're very dedicated to ICQ, having recruited their friends to join and having met new people through the chats. The only problem with these folks is their aversion to marketing messages, which they made clear by participation on message boards and posting web pages after Mirabilis was purchased. "If this sale to AOL goes though, Mirabilis will become the same corporate garbage dump that AOL has become. Users of Mirabilis (if any are left) will be faced with the same amount of spam/type messages waiting for them every time they log in, in addition to constant interruptions from unwanted advertisers," wrote one user.

The new software, ICQ99, is AOL's first attempt to advertise to these people without turning them off, and some long-time Silicon Alley players (veterans of the Total New York, Digital City New York transformation) have had key roles in developing it. Borthwick's former partner, Guy Garcia, is now director of programming for ICQ, and Carter Adamson, who had been an editor at Total New York, is a senior editor.

The team, which includes 13 other people in New York and 16 others in Tel Aviv, has quietly spent the last six months developing what Borthwick is calling a companion desktop application. The four megabyte client is still ICQ, with its variety of messaging features, but it's also portal-like. Perhaps the most visible change is the addition of an Inktomi-powered search engine called ICQ It! When you type in a search, a browser pops up with your search results. But it's what's above those search results that may be most important -- banner ads. The ICQ application itself doesn't have the rotating ads of its sister program, AOL Instant Messenger, but the new features will all lead you to places full of paid marketing messages. Already, the ICQ website gets 6 million page views a day, making it number 24 by Media Metrix measurements, and the addition of these features will likely only drive up the traffic numbers.

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So far, much of AOL's thinking on ICQ has been about how to keep its users involved and how to market to them, the idea of serving a more mass audience hasn't been forgotten. Plans are in the works to enable messaging between AOL Instant Messenger users and ICQ users, and Borthwick says the team is also looking at how to make the program's "simple" mode more simple. Although ICQ users seem to love the feature-rich nature of the program, it can be somewhat daunting to newbies, a situation that may hinder future growth at some point. The company is closely watching its week-to-week download numbers, realizing that changes may be needed if ICQ "breaks through" to become more mainstream. For now, though, complexity and an alternative feel are exactly what users are looking for. They'll certainly find all that in ICQ99, with a few ads thrown in for good measure.