On the downswing, chat room giant Paltalk plans pivot inspired by YouTube & Twitch

Paltalk is a strange company.

All startups risk it all to realize their vision, but 15-year-old Paltalk will live or die for something you probably haven’t thought about in a while: chat rooms.

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Paltalk launched during AOL’s prime. In 1998, the company released a group chat tool for the desktop and grew it for the next decade and a half to 96.5 million registered users. Today, Paltalk offers a few video chat products that somewhat compete with services like Skype, Spreecast, and Google Hangouts. Paltalk tells us it has 2.2 million monthly active users now — a small figure considering its age, but a sizable group apparently worthy of the NSA’s watchful eye.

After making headlines for its inclusion in PRISM, moonlighting as an accused patent troll, and playing host to users who may have been involved in Al Qaeda, Paltalk set out on a mission to reinvent itself with a new goal: to turn its existing video chat technology into hub for content creators while delicately maintaining the profitable chat room products that keep the company afloat.

A new app, unclear plans

“Currently, Paltalk serves members around the world seeking to socialize with one another through real-time group video, audio, and text chat,” a company spokesperson told VentureBeat. But, they said, “we see an opportunity to … serve the needs of content creators seeking to build, manage, and monetize their audience through interactive entertainment. Segments we plan to focus on include freelance entertainers, broadcasters, and celebrities.”

To win over a new demographic, PalTalk has hired execs and product leads from the WWE, the MLB, the Daily Beast, Complex Media, and Amazon. And the desktop-centric company has awoken to the importance of mobile. Its mobile team, once consisting of just two staffers, has grown four-fold over the last year.

The early fruits of this internal shift can be seen in Paltalk’s new mobile app, quietly revamped last month. The new app streamlines group and private video chat rooms and, although buggy, appears to be a step in the right direction; it’s a far cry from being ready to win over the sort of pseudo-celebrity content creators YouTube is famous for, however.

Over the years, Paltalk has been leapfrogged by the competition. And now that services like Twitch have successfully reinvented the group chat model into something that feels relevant, Paltalk is attempting to orchestrate a comeback.

The odds appear to be against Paltalk, but the company’s moves beyond the desktop show promise. comScore stats indicate that, despite Paltalk’s aging image, the company’s latest efforts have spurred growth. comScore tells VentureBeat that Paltak has grown 48 percent year over year on the Web and mobile, from 792,000 unique visitors in September 2013 to 1,168,000 in September 2014.

But the biggest thing that stands in the way of Paltalk’s new direction, it seems, is its legacy.

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