VoIP over Instant Messaging? It's Coming´┐Żand It's BIG!

With nearly 900 million IM accounts in play, will VoIP-over-IM obliterate all competition?

 By Sean Michael Kerner
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According to the Radicati Group, there will be 867 million instant messaging accounts in use by the end of this year, growing to over a billion by 2009. It's likely that a good number of those accounts will have direct access to VoIP within the same timeframe, which could profoundly alter both the IM and VoIP landscapes. Microsoft, Yahoo!, and AOL all have serious VoIP-over-IM products in the pipeline and all are set to capitalize on VoIP.

Skype has had little impact on IM usage according to vendors and analysts; VoIP-over-IM's impact on Skype however may be a different story.

Voice in IM—current usage
Voice connectivity in IM is nothing particularly new. Microsoft's MSN Messenger has had it since 2000, with AOL and Yahoo! for almost as long. For the most part, historically speaking, IM voice connectivity has been PC-to-PC and was not always of land-line quality.

MSN Messenger at one point also had PSTN services as well. "We actually did it a few years ago," Brooke Richardson, lead product manager for MSN explained to EnterpriseVoIPplanet. "We had PSTN services that we delivered with partners, but at the time the infrastructure and the service just wasn't quite there in terms of what it was delivering, so we wound the service down a year ago and have been improving the PC-to-PC functionality."

Voice quality of PC-to-PC calls has steadily improved over the last several years, however, as the technology has evolved and broadband adoption has increased. Neither Microsoft, Yahoo!, nor AOL was able to break out voice minutes used for VoIPplanet but all indicated a non-trivial amount of usage.

MSN's Richard said that though she couldn't provide an accounting of total minutes used, 25 million MSN Messenger users have been using the service's audio and video capabilities on a monthly basis. Chamath Palihapitiya, vice president and general manager for AIM & ICQ, America Online, told VoIPplanet that penetration of voice services into AOL's Instant Messenger (AIM)'s user based was as high as 75 to 80 percent. "Everyone for the most part has tried it," Palihapitiya commented. "Though we don't disclose minutes, it's a service that clearly we've had interest in and we've seen enough pent up demand that we've sort of double-downed our efforts in the space."

AOL recently launched a new beta of AIM, called Triton, which places a heavy emphasis on voice. Yahoo! has also launched a new IM client which similarly has favored voice.

"Since the introduction of high-quality voice, we've seen a two-thirds increase in voice usage among beta users." Yahoo! spokesperson Terrell Karlsten said. "With the launch of our enhanced voice calling feature, we expect even more people will take advantage of the high quality service as well."

There are a lot of different reasons why VoIP quality over IM is improving, not the least of which are the improved codecs currently being used. Skype, which arguably first popularized high-quality PC-to-PC calling, makes use of the Global IP Sound (GIPS) codecs. Microsoft recently licensed those codecs as well and MSN's Richardson noted that they'll likely be included in a future version to help further Microsoft's voice capabilities. AOL's currently in-beta AIM client, Triton, also makes use of GIPS among a suite of codecs.

"The GIPS codec is a great codec," AOL's Palihapitiya said. "We've taken great pains to make sure we support the best codecs in the market."

Vonage's softphone makes use of the Xten codec, which also happens to be the same codec that Yahoo! Messenger now also uses. Yahoo's spokesperson noted that in a recent study three-fourths of those who have used the PC-to-PC calling feature rate the sound quality equal to or better than a traditional phone line.

"Yahoo! Messenger's voice capabilities are based on the industry standard SIP protocol, enabling us to easily evolve and advance our voice offering to consumers in the future," Karlsten said.

The Skype effect
Though the Skype software has been downloaded well over 140 million times and is arguably the most used PC based VoIP application, the major IM players and at least one analyst don't believe it has had an effect on IM usage.

"We do not believe that services such as Skype have had a significant impact on regular public IM use," Radicati Group Analyst Matthew Anderson told VoIPplanet. "Since services such as Skype are still emerging in the market place, we have yet to see what type of impact it will have on the market."

The new generation of IM clients, offering enhanced voice capabilities, amongst a myriad of other advanced features, means that users don't need to leave their IM client. "What we're trying to do is to delight our users," MSN's Richardson said. "With our unified contact store we want to help connect our customers however they want to be connected."

AOL's Palihapitiya sees the evolution of AIM Triton as an evolution of how users view not just IM but communication in general. "People will make less of a distinction about the type of communication and more of a distinction about what they use to initiate it," he explained.