Despite being touted as one of today's key business tools, a new study finds that Instant Messaging is being used a lot more for flirting and gossiping than for actually doing business.

One-third of those surveyed admit to making sexual advances over IM while in the office, according to a study from Blue Coat Systems, Inc., a security company based in Sunnydale, Calif. And 65 percent of office workers use IM for personal conversations during the work day.

''While instant messaging has proven itself as a productive business tool, our research validates that its free-flowing and unmonitored nature is creating enormous legal liabilities, compliance and productivity issues for organizations worldwide,'' says Steve Mullaney, a vice president at Blue Coat. ''Organizations must now integrate a policy for controlling and logging IM as part of the overall Internet-use policy.''

And with Instant Messaging spreading like wildfire across corporate networks, its misuse has wide implications.

The Radicati Group Inc., a consulting firm based in Palo Alto, Calif., recently predicted that the current 590 million accounts will multiply into 1.4 billion by 2007.

And while only 26 percent of companies today have standardized on a common corporate IM solution, about 70 percent are using some form of IM, notes the Radicati Group. Security is listed as the top concern that IT managers have with users having Instant Messaging, followed by skepticism of its corporate business value.

And it seems their concerns about security might be well founded.

According to Blue Coat, almost half of respondents admitted using abusive language in IM conversations. And 40 percent admitted using IM to conspire with colleagues during conference calls. Nearly 80 percent admitted to gossiping over email.

''IM has been proven as an effective business tool for many people but a number of issues are coming to light that show there are some problems,'' says Tony Thompson, a manager at Blue Coat. ''People are conspiring with other employees while they're on conference calls. They use it as a sidebar of communication without the third party.''

Thompson notes that IT managers should be worried about the liability and other legal issues that could accompany misuse of Instant Messaging. During work hours, employees are representatives of the company and what write on IM reflects on the company. Telling dirty jokes or commenting on another employee's appearance, for instance, could create sexual harassment issues for the company.

Thompson says IM needs to be a part of companies' computer usage policies. When IT managers sit down with business executives and company lawyers to hash out telephone, computer and Internet usage policies, they also need to set guidelines for IM use.

''How conservative a company may be about employee communications will dictate the IM policy,'' he notes.