July 12, 2006

Finally, Microsoft, Yahoo messaging users can chat

By Eric Auchard

SAN FRANCISCO (Reuters) - Yahoo Inc. and Microsoft Corp.
said on Wednesday they have begun a limited public test to
allow users of the companies' respective instant messaging
programs to trade messages with one another.

The agreement to work together, first announced last
October, marks a long-awaited breakthrough among major instant
messaging services, which include AOL's pioneering AIM service,
Microsoft and Yahoo, along with more recent upstarts including
eBay Inc.'s Skype and Google's Google Talk.

Specifically, users of an upgraded version of MSN
Messenger, recently rebranded "Windows Live," can trade
messages with Yahoo Messenger, creating the world's largest
instant messaging community, with 350 million accounts.

These instant messaging, or IM, systems allow users to type
messages to others on their "buddy list" via computers and in
some cases over mobile phones. Historically, each provider
sought to create "walled gardens" that prevented users of one
IM system from talking to users of rival systems.

AOL agreed in December to make its U.S.-market-leading AIM
eventually work with, or to use the technical terminology,
"interoperate," with Google Talk, but no date has been set to
do so. AIM users can already chat with users of Apple Computer
Inc.'s iChat system for Macintosh computers. Google and AIM
work with various other independent IM projects too.

With the Yahoo and Windows deal, icons will allows users to
distinguish which program their IM contacts are using.

Executives said the two companies were initially testing
how to allow their vast audience bases to trade text messages.
IM users eventually will be allowed to make voice calls between
the two systems, but no specific timeline has been set.

"We are taking the crawl, walk, run approach," Blake
Irving, corporate vice president, Windows Live Platform, said
in a phone interview. "(Voice) is the feature that we both
think is extremely important" to add eventually, he said.

Yahoo and Microsoft said they plan to make interoperability
between their services broadly available in the coming months.

Users can register to join the test at
http://messenger.yahoo.com or http://ideas.live.com.

It is available in Argentina, Australia, Brazil, Canada
(English and French), China, France, Germany, Hong Kong, India,
Italy, Korea, Mexico, Netherlands, Singapore, Spain, Taiwan,
Turkey, Britain and the United States (English and Spanish).

Jupiter analyst Michael Gartenberg said the Microsoft-Yahoo
tie-up marks the culmination of years of jockeying for market
share by IM providers. "We have had people say they are working
on interoperability for the better part of a decade," he said.

"Consumers have pretty much settled in and defined their
preferred IM systems and buddy lists," he said. "It does make
it easier for many consumers who will need to keep one less
instant messaging system up and running now."

U.S. Internet traffic measurement firm Nielsen//NetRatings
data shows AIM with 47.2 million users in June, compared with
28.0 million MSN/Windows Live users and 22.5 million Yahoo
Messenger users. The unduplicated audience of Microsoft and
Yahoo was 43.5 million U.S. users, the survey showed.

Yahoo and Microsoft took issue with these numbers, citing
comScore Networks's global figures which showed that Microsoft
IM had 204 million users and Yahoo IM had 78 million users
worldwide. AIM had 34 million users, the comScore data showed.