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AIM vs. the world

Instant messaging is the choice of a new generation.

Of all the consequences of the talks between Microsoft and AOL (now temporarily suspended), the flap over instant messaging (IM) is perhaps the most important. AOL is holding its AIM messenger proprietary and refusing to open that network up so that AIM users can message with other IM users. Of course, Microsoft wants AOL to open its network and its technology and this is what is holding up talks between the two companies, described in my June 12 column.

In case you might think that IM is insignificant, consider the future. Most teens use it, according to a news survey on our site today. And when those teens enter the business world, IT managers will have to adjust their IT resources to keep them happy, as Nelson King indicated in a recent column. The survey indicated that 74 percent of teens use some form of IM. And most of them use it every day for sophomoric behavior. But when the technology and its users mature, an already huge market will explode.

The question is, what motivation does AOL have to open its networks? Right now, it owns a large but shrinking lead in market share, based mostly on the fact that most IM users start out as AOL users. The lead is shrinking mostly because of the growth of MSN and its open IM network. People want interoperability badly, and AOL is slowly paying the price. But it will not give up the fight, unless Microsoft can twist its arm by compromising on the other issues in their talks to renew a five-year working agreement.

According to a June 19 Wall Street Journal article, Microsoft has already compromised in two very important items and still has not been able to budge AOL on AIM. Those two items really amount to one. Microsoft would like AOL to cease and desist on its antitrust efforts against Redmond. Because AOL owns Netscape, if Judge Jackson’s ruling is upheld, AOL could privately sue Microsoft for up to $12 billion in damages. Also, AOL has been talking to the Justice Department about Windows XP and Microsoft.Net, anticipating the effects those new products will have in extending Microsoft’s desktop monopoly to the Internet. Microsoft would like AOL to call off those legal efforts, but has already pulled those demands off the table to focus on AIM.

The other chip Microsoft might play is in agreeing to allow AOL to offer its users either Windows Media Player or RealNetworks RealPlayer. Right now, Microsoft wants an exclusive deal and AOL is not willing to budge, in part because the scenario looks eerily similar to the 1996 deal, in which AOL agreed to exclusive Internet Explorer usage for AOL subscribers. My hunch is that if Microsoft offers to pull the exclusivity off the table, AOL will capitulate on AIM.

Imagine an Internet in which every user can instantly message every other user, no matter what the ISP. Imagine a buddy list that contains all your buddies. If AOL and Microsoft can give up two of their sacred cows, we all would be part of that world.

James Mathewson is editorial director of ComputerUser magazine and ComputerUser.com.

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