Microsoft and Yahoo to Link IM Networks

Microsoft and Yahoo will make their respective consumer instant-message networks partly interoperable in the second quarter of next year, the companies announced today.

This is the first such agreement between major providers of the extremely popular online service, which allows users to communicate in various ways, including text-message exchanges, PC-to-PC voice chats, voice-over-Internet-Protocol phone calls, photo sharing, file sharing, Webcam video transmission, and gaming.

Communications between MSN Messenger and Yahoo Messenger users, however, will be limited to exchanges of text messages, PC-to-PC voice chats, sharing of some emoticons, and the ability to add contacts from both services to their contacts' list, said Dan Rosensweig, Yahoo's chief operating officer, during a press conference.

Combined, MSN Messenger and Yahoo Messenger will have an estimated 275 million users, according to the companies. Nevertheless, America Online's AIM service remains the single largest IM network.


Their partnership suggests that Microsoft and Yahoo may have set their eyes on higher advertising revenue based on a larger aggregation of instant messenger users, according to John Delaney, principal analyst with Ovum.

It may also mark a shoring of strength by the two companies against Google, 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.

Talk to Each Other

MSN Messenger, Yahoo Messenger and AOL AIM don't interoperate, but programmers in the past have found ways to get around the problem. For example, Trillian, an application developed by Cerulean Studios, consolidates in a single interface IM contacts from an array 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, including Apple Computer's iChat, Reuters Group's system, and AOL's own ICQ, a sister IM network to AIM.


Like the Yahoo and Microsoft arrangement, the interoperability tie-ins that exist in the industry between different IM services are invariably limited to a specific set of features, as opposed to full interoperability in which one service's entire range of features is replicated on another.

In the case of Yahoo Messenger and MSN Messenger, the companies chose to focus on key core features, such as text messaging and PC-to-PC voice communications, while excluding (at least for now) advanced features such as games and photo sharing, Yahoo and Microsoft executives said during the press conference.

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

Jeremy Kirk of IDG News Service contributed to this story.

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