Net messaging standards war brewing?

In hopes of chipping away at AOL's lead in the market, Microsoft released its own instant messaging software yesterday and restated its support for an industrywide standard to make all chat applications compatible.

Microsoft miffed AOL yesterday, because a feature in MSN Messenger software lets users communicate with those using AOL's Instant Messenger.

This morning, AOL shot back, allegedly tweaking its systems to rebuff attempts to connect by Microsoft's messaging service.

Several News.com readers, including members of the Internet Engineering Task Force charged with seeking a standard protocol, reported today that they were unable to send messages from MSN messaging software to users of AOL Instant Messenger, depite being able to do so yesterday.

The readers said that attempts to send messages from Microsoft's software to AOL Instant Messenger users results in an "incorrect password/login" error.

Several people noted that they had no trouble using AOL IM to connect to others using the same service.

AOL declined to comment on whether it had updated its technology based on MSN Messenger.

The Internet standards proposal from Microsoft seems to have spurred the battle. Microsoft said it believes consumers should be able to use any instant messaging technology to reach other users, just as people can call each other on telephones even if the phone manufacturers are different. Right now, some companies--including AOL--have Internet messaging applications that only allow people with the same software to communicate with each other.

While some 40 companies, including Disney's Infoseek, support the standards effort, AOL wants no part of it.

Analysts say AOL is reluctant to join the standards movement to protect its huge market share, while Microsoft is proposing the standard so it can grab some of that share.

The market is important because Internet messaging companies, such as AOL and Microsoft's MSN, can sell advertisements on their chat applications--and it can drive users to their online services, said analyst Rob Enderle, of Giga Information Group. "People are using your software to keep in touch and your brand goes in front of their faces," he said.

Enderle said AOL simply doesn't want to dilute its user base. About 25 million people use its Instant Messenger software, and another 38 million uses its ICQ chat software--a following that Microsoft wants to access.

"The bottom line is the challenging vendor always likes standards the best, and the entrenched vendor tends to fight standards to maintain its dominance," he said.

Historically, Microsoft has made a living by jumping into a new market and proposing a standard that does not include its entrenched leader--in this case, AOL. Two years ago, Microsoft tried to establish a standard for data warehousing without Oracle's involvement. Oracle, a database giant, balked at the proposal originally, but it recently succumbed and announced support for the standard.

Deanna Sanford, MSN's lead product manager, said Microsoft invited AOL to join the Internet messaging standards effort two years ago, but AOL refused.

An AOL spokeswoman declined to state the reason the company does not support coming up with a standard--and whether it would in the future. The requirements for proposing protocol to connect the chat software is still winding its way through the Internet Engineering Task Force (IETF).

"I have personally sent messages to Steve Case and others at AOL saying that we are reaching the end of our research phase and would welcome their input," said Vijay Saraswat, co-chair of the IETF's Instant Messaging and Presence Protocol working group. Unfortunately, he said, he has not received a meaningful response from anyone.

"We are supportive of standards," the AOL spokeswoman said. "At some point, we want to support standards that are helpful to our members and make their online experience better."

Sanford, of Microsoft, said the software giant's efforts for a standard is akin to Web users being able to email everyone regardless of who manufactured their email software.

"Today, it doesn't matter if you're using AOL NetMail or Microsoft Exchange. All that matters is we can send email back and forth. And we want to get to the same point with instant messaging," Sanford said.

AOL, however, said Microsoft's standards push is merely a smokescreen.

AOL charged that MSN Messenger poses a security risk to its users because they are asked to type in their AOL username and password. "They're goading people to reveal their password just like hackers do," the AOL spokeswoman said. "We always tell our customers to never give out their passwords. Microsoft is going against what we've tried to do."

A Microsoft spokesman, however, said there is no security risk because MSN does not gain access to the passwords. To link the two services together, MSN's chat software connects to AOL by using AOL's servers, he said.

While the animosity between Microsoft and AOL boiled over yesterday about instant messaging, the two companies have long been bitter rivals. They compete on several fronts, including online services, Web browsers, and e-commerce software.

When AOL purchased Netscape this spring, it not only took over Netscape's Navigator browser and e-commerce software, but it also gained Netscape's investment in Red Hat, the industry's dominant Linux company. Linux is an operating system that competes with Microsoft's Windows operating system.

As for the standards fight in instant messaging software, Enderle of Giga Information Group believes AOL will eventually support the standard.

"It's hard to argue against standards," he said.

News.com's Rose Aguilar contributed to this report.