AOL IM may have shot itself in the foot Pt II

NEWS It is in the realm of anti-competitive behaviour, however, that a decision in 1999 to close AIM to interoperability may return to haunt AOL. Showing that it, too, is willing to play the antitrust card, Microsoft has been a vocal critic of AOL ever since the online service's engineers blocked MSN Messenger and Yahoo! Messenger from communicating with AIM. Late last year, Microsoft chairman Bill Gates called William Kennard, then chairman of the Federal Communications Commission, urging him to closely examine AOL's IM dominance when studying the company's proposed merger with Time Warner. Microsoft has also helped lead IMUnified, a coalition of companies including Yahoo!, AT&T and Excite@Home, which is expected to launch a system that will link the messaging products and networks of its members. IMUnified aggressively lobbied federal regulators and Capitol Hill to force AOL to open its IM network as a condition of its merger with Time Warner. The FCC did say it would require interoperability, but only once AOL begins to offer "advanced" IM services such as video and audio streaming through its product. Although competitors called the requirement insufficient, AOL Time Warner remains under the scrutiny of regulators wary of the company's ownership of cable networks; TV, film and music content; and interactive TV. In addition to AIM, AOL owns the second-largest instant messaging service: ICQ. Both services are available free; their value comes from the marketing and cross-promoting of other AOL products, or in the recruiting of new subscribers to the company's online service. None of this is lost on Microsoft, which has built its business through similar kinds of promotions for its products. That means it views instant messaging as a way to maintain control of the entire computing environment, not just as a tool for real-time text conversations punctuated by smiley-face icons. "Browsers weren't a big business, but they were strategic," said David Smith, an analyst at Gartner. For instant messaging, "there's no dollars involved, but it's important for other reasons," such as advertising, e-commerce and other complementary software. IM proponents believe the technology will become as ubiquitous and convenient as the telephone. Of particular importance is the technology's ability to let people know when others are online -- "presence", in industry vernacular. The detection in turn can help communications devices such as mobile phones, handheld computers and telephones reach a desired party. On the desktop, the software that provides IM services sits on top of a computer's operating system. That is precisely what concerns Microsoft, which has ferociously guarded its Windows franchise. "I think Microsoft is ultimately going to win the instant messaging wars," said Jeff Pulver, a telecom entrepreneur and organizer of the annual Presence & Instant Messaging conference. "Microsoft thinks strategic, while AOL thinks tactical. Take me back to Pt I/ AOL may have shot itself in the foot Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.