Yahoo, Microsoft to Link IM Networks

UPDATED: Yahoo and Microsoft are linking up their IM networks to allow MSN and Yahoo Messenger users to communicate across the two platforms, creating a global network of more than 275 million strong.

The agreement brings actual federated IM to the industry after years of mostly talk about the prospect. During a press conference today, the companies said being able to instant message between IM communities is one of the features most requested by MSN Messenger and Yahoo Messenger users.

The deal means that, in addition to exchanging instant messages, consumers from both communities can see if friends are online or not, swap emoticons and generally communicate without being on the same IM network. Yahoo and Microsoft said they would launch the interconnectivity capabilities between MSN Messenger and Yahoo Messenger in the second quarter of 2006.

The two companies will look into providing more enhanced features, such as PC-to-PC VoIP , once they get the new IM network servers up and running, which will be based on the SIMPLE protcol. For the time being, IM enhancements will focus on PC-to-PC communications, so Yahoo’s recent acquisition of Dialpad Communications technology, picked up in part for its PC-to-Phone service, won’t likely fall under that category.

Officials said complexity is the main reason they are not incorporating more features into the interoperable IM service next year. SIMPLE, while a proven technology, has not been scaled to the extent Yahoo and Microsoft want to deliver, they said.

“This is good for consumers; it’s just a lot harder to do when you’re flying an airplane as fast as these companies are flying and you want to change the engine at the same time,” said Dan Rosensweig, Yahoo COO, in a press conference. “We have to get it right.”

The combination of MSN Messenger and Yahoo Messenger networks could put a serious competitive dent in AOL’s dominance in the IM world — or bring the company closer to working out a federated IM deal with the other IM providers. Microsoft, Yahoo and AOL run the three largest IM networks in the world.

A recent study by research firm the Radicati Group reports some 867 million IM accounts worldwide today, a number expected to grow to 1.2 billion accounts in 2009. Public IM networks, such as AIM, MSN Messenger and Yahoo Messenger, primarily make up those numbers.

While Internet citizens have long called for interoperability between the top three, there has been no real serious work undertaken to let an MSN Messenger user talk to an AIM user or Yahoo Messenger user. Every once in a while, two of the three would come to the table but nothing ever came of those meetings.

Blake Irving, MSN communications services and member platform group corporate vice president, would not say whether recent talks with AOL touched on IM interoperability. Even if AOL and Microsoft were to come to some kind of agreement over federated IM, they probably wouldn’t be able to do anything about it right now, he said in the press conference.

“The complexity of a deal like [Yahoo and Microsoft] and trying to execute is such that you can’t do it with more than one partner at a time,” he said.

When asked about a possible similar arrangement with Google, which launched its own IM service earlier in August.

“Certainly, we’d be willing to talk to them, but in terms of executing against the deal we described earlier, we’ve got to get this right,” Irving said.

The closest public IM users have come to IM interoperability is through IM managers, such as Trillian, which lets users combine their AIM, Yahoo Messenger, MSN Messenger, IRC, Jabber and ICQ identities under one console.

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