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AIM, ICQ to interoperate

update AOL says it will let its next version of AIM communicate with ICQ, a surprise move that will topple the long-standing barrier between the two popular IM services.

update America Online said it would allow its next version of AOL Instant Messenger to communicate with ICQ, a surprise move that will topple the long-standing barrier between the company's two popular IM services.
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The ability to communicate with ICQ is a feature in AIM 5.1, a test version of the software currently available on AOL.com. People who download AIM 5.1 will be able to add ICQ users to their buddy lists and send them instant text messages. AIM users will also be able to convert ICQ identities, which are typically a sequence of numbers, to nicknames.

Users of the current version of ICQ cannot add AIM members to their buddy lists, but future versions of ICQ may let them do so, AOL said.

The decision to let AIM users add ICQ buddies is significant because it represents the first step in allowing the two largest instant messaging services, both owned by AOL, to communicate. AOL has been subject to industry criticism and federal regulatory scrutiny for its resistance to opening its IM network to outsiders.

The company has long claimed that AIM and ICQ users had no interest in communicating with one another. But ICQ has a large international audience, especially in Europe, and AOL spokeswoman Anne Bentley said the test was a response to growth in AOL Europe and consumer feedback regarding the two messaging setups.

"We've removed the virtual glass wall that separates them," Bentley said.

Technically, allowing AIM and ICQ to communicate does not mean AOL is opening its instant messaging network. AIM and ICQ have been running on the same server network since 1999. AIM currently has 180 million registered usernames, with 30 million users accessing the software per month, taking multiple registrations into account. ICQ has 135 million registered usernames; AOL does not release the number of users who access that software per month.

"AOL is allowing interoperability with ICQ, which is another way of saying AOL is allowing interoperability with AOL," said Michael Gartenberg, an analyst at market research firm Jupiter Research.

"While this level of interoperability is certainly interesting, it's not the broad and far-reaching interoperability that users of other services are looking for to consolidate their accounts."

Microsoft: Unfair market exploitation
Competitors and critics, most notably Microsoft, have complained to regulators that AOL's resistance to opening AIM to third parties is an unfair exploitation of its market leadership. During the review of the AOL-Time Warner merger in 2000, Microsoft Chairman Bill Gates urged Federal Communications Commission officials to closely examine AOL's IM dominance. Gates also advocated the need for a standard that would let IM services interoperate.

The FCC is currently scrutinizing AOL for its IM dominance. As a condition of AOL's merger with Time Warner, the FCC ruled that AOL Time Warner must offer interoperability with outside services should it launch an "advanced IM" product. In other words, any high-speed version of AIM that lets people send high-quality audio and video would require AOL to open its IM network.

Calls for interoperability have faded among users in the consumer market, but they've begun to heat up among business users. Earlier this month seven top brokerage firms formally announced a coalition to promote the adoption of standards in the fragmented instant messenger industry.

Microsoft has made instant messaging a central feature in its Windows XP operating system and its MSN Internet service, and is working on a corporate-communications tool, code-named Greenwich, that will include instant messaging. Yahoo has also seen an increase in the popularity of its Yahoo Messenger software. In a sense, both Microsoft and Yahoo have benefited from the lack of interoperability because consumers end up downloading and operating multiple instant messaging clients.

AOL has also argued that developing an interoperability protocol is more difficult than it seems. In a filing to the FCC last July, AOL said it would focus fewer resources on developing a protocol to let outside servers to communicate with its setup. This server-to-server interoperability would require significant time and resources, the company said.

Instead, AOL said it would pursue marketing agreements to let companies develop their own instant messaging software based on AIM's technology and infrastructure. In the modeling of such agreements, AOL is using Apple Computer's iChat as an example.

AOL's Bentley would not consider the AIM 5.1 feature an example of server-to-server interoperability because AIM and ICQ run on the same network.

Competitors remain skeptical of AOL's moves.

"Until there's interoperability among the three leading instant messaging players--Yahoo, MSN and AOL--this minor move really won't have a significantly positive impact on the broader (instant messaging) community," a Yahoo representative said.

A Microsoft representative did not comment.