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New AOL IM program offers encryption

America Online releases a version of AIM that offers client-to-client encryption. The company also unveils a gateway that lets firms decode encrypted IMs leaving their servers.

America Online released on Monday an updated version of its AOL Instant Messenger service that offers client-to-client encryption.

AOL is partnering with VeriSign to provide the feature in AIM 5.2, as the new consumer client is called. Encryption costs $9.95 a year for individuals, but AOL also sells certificates in bulk to companies.

As part of the encryption feature, AOL also introduced version 2.0 of its AIM Enterprise Gateway. The product enables corporate technology systems to decode encrypted AIM messages leaving a company's servers. This lets information technology departments log and archive all IM messages. Industries such as financial services are governed by rules that require IM conversations to be monitored and archived. The AOL gateway will continue to use technology from FaceTime Communications.

The announcements highlight AOL's attempts to sell versions of its popular AIM client to businesses. AIM has been the most popular instant messaging service for consumers, amassing millions of users who rely on the software to exchange text messages in real time. However, IM remains a free service for which providers, including AOL rivals Microsoft and Yahoo, have avoided tacking on fees.

The big three Internet giants have all launched enterprise IM products in hopes of tapping revenue from business users. Corporations have increasingly adopted IM as an alternative form of communication, but many corporate technology departments have cracked down on instant messaging programs for fear of security and accountability breaches.

Regulated industries such as finance and health care are beginning to crack down on unfettered IM use. Earlier this month, the National Association of Securities Dealers said IM messages, like e-mail, should be archived for three years.

Enterprise software makers, including other divisions in Microsoft, IBM and Sun Microsystems, are also trying to sell enterprise IM products to existing clients. Later this summer, Microsoft will release Office Real Time Communications Server 2003, initially as an enterprise IM product, but eventually, perhaps, one that includes Net phone calling and videoconferencing features.