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Yahoo IM buttons up cell phone shortcut

The Internet giant makes room for a shortcut for instant messaging people with AT&T Wireless cell phones. It's a sign of faith in mobile messaging.

A shortcut to mobile messaging has won a place on Yahoo's instant messenger toolbar, considered prime real estate in the window for conducting IM conversations.

Clicking on "Mobile" lets Yahoo Messenger subscribers send messages to friends who own AT&T Wireless cell phones--even if those friends aren't registered users of Yahoo. The service is free, but AT&T Wireless subscribers have to subscribe to "mMode," a wireless Web service that costs between $4 and $12.50 a month.

To make room on the toolbar, Yahoo evicted a shortcut for "PC phone calling," which lets IM users make phone calls directly from a computer, said Lisa Pollock, director of Yahoo messaging products. PC phone calling is still an option, but just isn't as prominently displayed. The new-look toolbar is available in Messenger 5.5, the latest update.

The changes to the toolbar signify the growing importance of cell phones for Yahoo and other instant messaging companies. Wireless represents a new revenue source because cell phone users, unlike computer users, are charged for every IM they send or receive. Wireless messages generally cost about 10 cents to send and four cents to receive.

U.S. wireless carriers offer access to instant messaging because the few pennies earned for every message sent or received could make up for sagging profits, which have been hit by increased competition and global economic gloom.

Microsoft and America Online also have deals with most of the top wireless carriers to either give prominent placement of links to their content and services on the cell phone's deck--prime real estate on the phone's tiny screen--or to sell the services separately.

Wireless messaging, though, hasn't caught on yet with America's 138 million cell phone users. Less than 10 percent of the nation's wireless phone use the phone's tiny keypad to send messages, according to various industry analyst estimates.

However, Yahoo and the Cellular Telecommunications and Internet Association (CTIA), a cell phone industry group, believe the niche is showing some signs of life. CTIA president Thomas Wheeler said that in June, some 1 billion wireless e-mails were sent in the United States--compared with just 3 million sent in the same period a year earlier.

"We're constantly trying to stay on top of trends," Yahoo's Pollock said. "It has become apparent that the text messaging world is growing rapidly."