Instant messaging providers in access battle

Instant messaging providers are facing off as the result of a plan by America Online Inc. (AOL) to prevent Microsoft Corp. and Yahoo Inc. instant messaging customers from “chatting” with its own users.

AOL is currently the market-share and brand-name leader in the instant messaging space, but Microsoft and Yahoo are seeking to get in on the action. Last month, both companies released new versions of their instant messaging products, which provide users with a means for communicating with AOL Instant Messaging (AIM) users. In doing so, they were accessing user AIM passwords, which AOL decided was a breach of security and bad consumer practice; as a result, the company made moves to deny access to its network.

Brian Park, senior producer of Yahoo Messenger in Santa Clara, Calif., stressed the importance of interoperability between different instant messaging systems.

“Instant messaging is one of the killer applications on the Internet now, but if (different instant messaging systems) talk to each other, (usage) will explode…and users are demanding this,” Park said. “So we’re open to working with everybody to make sure this happens.”

However, Park added that to make the market really take off, standards are needed in the instant messaging space.

“If we’re going to open ourselves and everyone else does too, then from a technical standpoint, it makes sense to do this all together and not on a case-by-case basis,” Park added. “All of us need to talk to each other and figure out what the next steps are.”

At press time, Yahoo had not been contacted by AOL or Microsoft, according to Park.

One analyst agreed there is a need for a formal discussion about interoperability, but he also warned of problems ahead.

“Beyond the initial surface of do you want (AOL) to have the established market space, there are decent legal issues here about using another corporation’s product,” said David Baltaxe, an analyst at Current Analysis in Sterling, Va. “The true potential of the instant messaging market is really unknown right now, but it is considered huge. So companies are banking on that to be the future and a lot of nerves are on edge.”

Baltaxe warned, however, that “consumers need to be thought about and can get easily lost in the wrangling.”

Another analyst said he believes AOL is completely out of line in this situation.

“Essentially, what AOL is doing is denying services to their users by prohibiting them from communicating with users of Microsoft’s Instant Messenger program. This is akin to AOL shutting down e-mail from UUNet users or that of any other ISP, simply because the e-mail originates from a competitor,” said Irwin Lazar, network analyst at NetReference, also in Sterling, Va. “In the long run, I believe that these types of actions can only hurt AOL.”

AOL and Microsoft were unavailable for comment.

Separately last month, Lotus Development Corp. announced plans for an update to its Sametime conference software that adds support for AIM.