Microsoft and Yahoo to link IM networks

Combined, the two will have about 275M users

Microsoft Corp. and Yahoo Inc. plan to make their respective consumer instant-message (IM) networks partly interoperable in the second quarter of next year, the companies announced today.

This is the first such agreement between major providers of this extremely popular online service, which allows users to communicate in a variety of ways, such as text-message exchanges, PC-to-PC voice chats, voice-over-IP (VoIP) phone calls, photo sharing, file sharing, webcam video transmission and gaming.

However, communications between MSN Messenger and Yahoo Messenger users will be limited to exchanging text messages, PC-to-PC voice chatting, sharing some emoticons and adding contacts from both services to their contacts' list, Dan Rosensweig, Yahoo's chief operating officer, said during a press conference.

Combined, MSN Messenger and Yahoo Messenger will have an estimated 275 million users, according to the companies. However, America Online Inc.'s AIM service is the single largest IM network in terms of users.

MSN Messenger, Yahoo Messenger and AOL AIM don't interoperate with one another, but there have been ways to get around that issue. For example, Trillian, developed by Cerulean Studios, is an application that consolidates in a single interface IM contacts from a variety of IM services, including those three. While Trillian doesn't solve the interoperability problem, it does prevent users from having to keep an IM buddy-list interface open for each network.

Ironically, MSN Messenger, Yahoo Messenger and AOL AIM do interoperate with Microsoft's enterprise IM system Live Communications Server 2005.

AOL AIM interoperates with other IM platforms, such as Apple Computer Inc.'s iChat, Reuters Group PLC's system and AOL's own ICQ, a sister IM network to AIM.

Like the Yahoo and Microsoft plan, the interoperability tie-ups that exist in the industry among IM services are invariably limited to a set of features, as opposed to full interoperability where the entire range of features of one service is replicated on another.

With Yahoo Messenger and MSN Messenger, the companies decided to focus on key core features, such as text messaging and PC-to-PC voice communications, leaving out -- at least for now -- advanced features such as games and photo sharing, Yahoo and Microsoft officials said during the press conference.

They also stressed repeatedly that the hard work for the Yahoo Messenger and MSN Messenger teams begins now, because linking the two massive IM networks will be complicated, particularly since both companies want to make sure users' security and privacy aren't compromised .

However, the two rivals-turned-partners believe the work will pay off by expanding their respective IM communities and giving users a much-requested development.

"This is one of those situations where one-plus-one can equal three," said Blake Irving, corporate vice president of the MSN Communication Services and Member Platform group. "We're excited to announce plans around something that we know for a fact will delight our users."

The partnership means Microsoft and Yahoo may have set their eyes on higher advertising revenue based on a larger aggregation of IM users, said John Delaney, a principal analyst at Ovum Ltd.

It also may mark a shoring of strength by the two companies against Google Inc., which is positioning itself as a strong challenger with its Gmail Web mail service and new Google Talk IM service, Delaney said.

"I think Google represents a big threat both to MSN and Yahoo, both of whom are based on communication services," Delaney said.

Jeremy Kirk of the IDG News Service contributed with this story.

Copyright © 2005 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon