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Commentary: Taking "AIM" at AOL

Microsoft's enhanced version of Messenger, which the company intends to integrate into Windows XP, adds new technology to wrestle the messaging lead from AOL Time Warner.

By Michael Silver and David Smith, Gartner Analysts

Microsoft's enhanced version of Messenger, which the company intends to integrate into Windows XP, adds new technology to wrestle the messaging lead from AOL Time Warner.

Windows Messenger represents a combination of Microsoft technology, including MSN Messenger and NetMeeting, along with core technology (newly licensed from PictureTel) that provides echo/feedback cancellation and codecs (coders/decoders). Messenger also makes the combinations of technology easier to use and more accessible.

Windows Messenger supports the Session Initiation Protocol, a new Internet Engineering Task Force standard. Microsoft will integrate Messenger into the remote assistance features of Windows XP and will include features in Messenger targeted at Internet gaming. Initially, communication will be limited to two people, but Gartner expects Microsoft or third parties to offer multi-user communication for an additional fee.

See news story:
Microsoft messaging tactics recall browser wars

Microsoft's move to integrate messaging technology more completely into Windows XP resembles the strategy the company followed when it integrated Internet Explorer into Windows to gain market share against Netscape Communications (acquired by AOL in 1999). In this recent instance, Microsoft has added video technology.

When America Online merged with Time Warner, the two parties entered into a consent decree to allay antitrust fears, which requires them to provide interoperability with its AOL Instant Messenger (AIM) service if it adds so-called "enhanced" messaging services such as video.

Gartner believes that, in addition to increasing the use of its Messenger service, Microsoft plans to add video capabilities to Messenger and Windows XP for three strategic reasons:

• To jump ahead of AIM, a move that would increase pressure on AOL to open up its AIM service to interoperability, which would benefit consumers.

• To broaden the focus on potential antitrust issues to include AOL Time Warner and not just Microsoft, thus diffusing regulatory focus directed at Microsoft as it readies Windows XP amid myriad antitrust accusations. However, the new U.S. administration will likely not pursue antitrust agendas against either company. AOL will likely not open up its AIM technology until it feels it must, which Gartner believes will be when Microsoft achieves about 40 percent or 50 percent of the market by the middle or end of 2002.

• To encourage more users to sign up for its Passport service, which will make it easier for Microsoft to sell them additional services over the Internet.

Enterprises should carefully evaluate Microsoft Messenger and understand the implications that voice and video will have on their networks. MSN Messenger will be controllable through group policy, should an enterprise want to disable it.

(For related commentary on the battle between Microsoft and AOL Time Warner in the messaging market, see registration required.)

Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.