Yahoo just debuted a new integrated chat feature for Yahoo Mail Beta here at the Web 2.0 Summit. The demonstration was led by Ethan Diamond, director of product management, and Brad Garlinghouse, a senior product VP at Yahoo.
When a user starts addressing a new email, a "Chat with this person" option appears in the address auto-complete field if the person you're writing to is available to chat. Click on the link and the email tab automatically transforms into a chat window. At the end of the chat, when your chat partner quits the chat, a link appears in the chat window giving you the option to send the person an email. Click on that link and the chat window transforms back into an email with your chat session attached as quoted text.
They've also added an integrated buddy list into Yahoo Mail Beta that shows all of the people in your mail contact list who are currently online, logged in and available to chat. This particular function is an extension of what's already built into Google's GMail and its integration with your contact list.
Yahoo Mail Beta is the Ajaxified next generation of Yahoo Mail, which currently has 250 million active users. Yahoo Mail Beta is expected to replace Yahoo Mail some time in 2007.
The demo showed only Yahoo chat icons in the buddy list. Although Brad and Ethan made no mention of it, we can assume that all of Yahoo Mail's interoperability with your chat buddy list applies only to Yahoo Messenger, the company's own proprietary chat platform, (I'll find out as soon as I can). If that's the case it's a shame, and it really illustrates how badly we need an open IM standard. Tools like these are exciting and fresh, but they really only become truly usable to me when I can use it with any service. Even if I'm sold on Yahoo Mail, I still use AIM for chat. And if I can't chat with other AIM users in my mail application, any fancy new chat features don't improve my experience in any significant way.