My take on it is that when MSN Messenger came out, they stored the contacts "in the cloud" (which was a new concept back then). So let's just say hypothetically that Windows 95 crapped the bed with a true blue screen of death, you'd re-install MSN Messenger and bam, your contacts were back. ICQ kept contacts local and if you lost them, you lost them.
True, but they caught up within one year and had the feature. Then they heavily bloated the client, then released a "lite" version which really brought them back on the map. Then facebook came and suddenly it was cooler to communicate non-instantly for some time. :)
Do you remember that feature that you could use to "call someone's attention"? It would make a lot of noise and the window would shake like crazy in your face.
IT was great for dating around 2000. Search by gender, age, city, open conversation and try my luck. Ended up in ~4 year long relationship from random contacts.