Interoperability -- the holy grail of instant-messaging addicts -- is slowly moving toward fruition.
And now that Microsoft and AOL Time Warner have agreed to explore how to make their IM networks work together, it's evident that the two largest industry players want a major role in determining how the future of messaging shakes out.
The two companies, known for their long-standing adversarial relationship fueled by litigation over AOL claims that Microsoft illegally undermined its Netscape browser business, agreed last week to settle their differences.
Although the main sticking point in the settlement was a $750 million payout from Microsoft (MSFT) to AOL (AOL), the two companies augmented the agreement by announcing several new collaborative projects. Included in the list was a plan to "explore ways to establish interoperability between AOL and MSN Instant Messenger networks."
Industry analysts viewed the announcement as noteworthy from the standpoint of corporate image boosting, as it shows the two industry heavyweights attempting to bury the hatchet. However, analysts also saw the move toward interoperability as an inevitable progression, as increased adoption of IM, particularly among businesses, spurs greater demand for a standardized platform.
"In terms of the interoperability, it's significant because AOL and MSN are two of the three top consumer-grade IM clients in use right now," said Michael Osterman, president of Osterman Research.
"But it's probably less significant in that they're probably going to end up being interoperable anyway even without this agreement," he said.
Among users of consumer IM platforms, a chief complaint for years has been that people can only send messages to others who have downloaded the same message client.
Heavy users of instant messaging often find they have to download several different programs, including MSN, AOL's Instant Messenger and Yahoo Messenger, to chat with all their friends and colleagues.
Although this isn't the most onerous inconvenience, since the three most popular platforms are all easily downloadable for free, users do find it cumbersome in comparison to e-mail. Among e-mail users, it's taken for granted that standards exist that allow a user of MSN Hotmail to send a message to an AOL dialup customer, or any other account, for that matter.
In the past, AOL has balked at offering full interoperability for AIM. The company announced last summer that it was curtailing efforts to make the messaging system work with rivals, saying the task had proven too difficult and expensive. The company also implemented a block last year that prevented users of Trillian, a service that lets users run multiple instant-messaging services on the same screen, from accessing its system.
Still, the industry leader faces some outside pressure to make AIM play nicely with others. When regulators approved the merger of AOL and Time Warner three years ago, one of the stipulations was that AOL could not offer advanced instant-messaging services such as streaming video to its broadband subscribers until its IM servers could be used with messaging services offered by other companies such as Microsoft and Yahoo.
Although that hasn't happened yet, Genelle Hung, market analyst at the Radicati Group, believes that eventually "IM is definitely going the way of e-mail" and AOL and its rivals will have to create interoperable platforms.
Osterman says much of the drive for interoperability comes from businesses, which increasingly are adopting proprietary instant-messaging platforms for communicating with co-workers and clients.
Many businesses pay extra for corporate IM services, such as Lotus Sametime, AIM Enterprise Gateway and Microsoft's Real Time Communications Server (currently in beta testing), which offer tighter security and tools for tracking IM use and controlling access to the system.
Osterman believes Microsoft and AOL are moving toward offering interoperable business-messaging products, since both adopted systems based on industry standards for instant messaging backed by the Internet Engineering Task Force.
But instant-messaging providers probably will be less motivated to provide an interoperable system for nonpaying users, since doing so could hurt their bottom lines.
"They derive a lot of revenue from a free product like that," said Hung, noting that AOL and other messaging providers funnel a steady stream of advertisements to screens of their IM users.
If users were able to seamlessly hop to another instant-messaging provider, the current industry heavyweights would stand to lose a sizeable captive advertising audience.
