Microsoft, Yahoo to launch instant messaging connection

NEW YORK -- Yahoo and Microsoft said Wednesday they signed an interoperability agreement that will allow people who use their respective consumer instant messaging services to interact with each other.
The companies expect to launch the free interconnectivity services in the second quarter of 2006.

Yahoo and Microsoft estimate they will have a high percentage of the 275 million people who use IM services worldwide.

"Yahoo and Microsoft share a commitment to providing the highest-quality experience possible for consumers, and today's groundbreaking announcement underscores our desire to provide consumer interoperability between our thriving IM communities," said Terry Semel, chief executive at Yahoo.

"This is truly a turning point for the IM industry, and we believe our agreement with Microsoft will help usher in a new era of IP (Internet protocol) communications."

The companies have been speaking for some time, but talks became "earnest" over the last year, Dan Rosensweig, Yahoo's chief operating officer, said in a conference call Wednesday.

MSN and Yahoo said that outside the United States, the combined user base will be larger than that of Time Warner Inc.'s AOL, which pioneered and dominates the instant-messaging market.

"If you leave the boundaries of the US, it's MSN and Yahoo. ... You don't find a whole lot of AOL," said Blake Irving, corporate vice president of MSN.

Asked why MSN and Yahoo are not partnering with America Online, or whether they had been in discussions for a three-way interoperable service, Rosensweig said that it was difficult enough to bring two IM communities together, much less three.

As to whether MSN and Yahoo would agree to interoperate with Google Talk, Rosensweig suggested that the founders of Google, Larry Page and Sergey Brin, use the upcoming service from Yahoo and MSN.

"Larry and Sergey can both download and get interoperability," said Rosensweig.

For its part, Google said it is open to interoperability as well.

"Google believes in user choice which is why we developed Google Talk using open standards," said Google spokeswoman Eileen Rodriguez.

"We made a commitment to open interoperabililty and continue to encourage service providers to fully open up their networks. We welcome all efforts to drive openness among communications services, and interoperability is a step in the right direction."

Yahoo and MSN combined would have seen 46 million users on their services in August, according to comScore Networks. That number might be inflated, however, because of an overlap in user base. AOL Instant Message saw 49 million users in the month of August while ICQ, owned by Time Warner, had 1.6 million users.