AOL not sold on IM interoperability

Instead, AOL will pursue marketing agreements with other companies under which they will funnel their IM services to AOL's 150 million registered instant messaging users on AOL's servers. AOL spotlighted its agreement with Apple Computer as a prime example where AOL is essentially powering Apple's iChat IM service. All communications among iChat users and with AOL users are facilitated on AOL's servers.

In contrast, server-to-server interoperability would mean establishing communication links between two distinct IM networks, such as between AOL and MSN or Yahoo. This is where AOL has alleged that security and privacy issues have arisen for all parties trying to interoperate. For AOL, the investment may not be worth the effort.

"It has proven a hard nut to crack for the entire industry, and it is clear through testing that arriving at a server-to-server interoperability solution would require further significant expenditure of time and resources to develop," said AOL spokeswoman Kathy McKiernan. "We've simply made the decision to focus our efforts in this other direction."

Instant messaging has been one of the most popular applications on the Internet and one of the most contentious topics for debate. Proponents have compared IM's potential to that of the telephone, allowing instant text exchanges through the Internet. AOL has long been the undisputed leader with its two popular IM services, AOL Instant Messenger and ICQ. However, competitors have at times claimed AOL's dominance akin to unfair competition and have lobbied the government to force interoperability.

The document, filed last week, is part of a required progress report that the Federal Communications Commission enacted as a condition to approving the merger between AOL and Time Warner in January 2001. The conditions required that AOL file progress reports of its interoperability tests every 180 days. It also required AOL to open its instant messaging network to a competitor if it decides to offer "advanced, IM-based high-speed services" (AIHS) through Time Warner Cable, both divisions of parent company AOL Time Warner.

At the time of the ruling, then-FCC Chairman William Kennard said the restrictions were implemented so AOL would own up to claims that it was exploring interoperability.

"All we're doing" with IM conditions, Kennard said during the press conference in 2001, "is accepting AOL's statements that interoperability is a good thing, and we're going to hold them to that."

In August 2001, AOL began server-to-server tests with Sametime, an instant messaging product developed by IBM's Lotus. Tests were concluded a month later with no clear assurance that the two services would link.

Meanwhile, efforts to develop an industry standard protocol have been mired in delays and road blocks for SIMPLE (Session Initiation Protocol for Instant Messaging and Presence Leveraging). To date, the effort is making progress, albeit at a snail's pace.

The parties themselves have also tempered their enthusiasm for establishing interoperability. The other two IM heavyweights, MSN and Yahoo, have seen tremendous growth in their IM services over the past two to three years. Interoperability could limit their abilities to lock in consumers and market other services and products to them.

Microsoft itself has increasingly tied instant messaging into its operating system. Its Windows Messenger service is a central feature in Windows XP and is interoperable with its Web-based product MSN Messenger.

Yahoo spokeswoman Mary Osako said in a statement that the Web portal "continues to support efforts towards functional interoperability." Microsoft was not immediately available for comment.

One of AOL's primary arguments in the filing was that the rest of the industry was sitting on its hands in pursuing interoperability.

"Despite the ready assurances of other IM providers that interoperability could--and would--be easily and quickly achieved, no other IM service has implemented server-to-server interoperability in the 18 months since the merger order was released," the filing read.