Microsoft and Yahoo announced on Wednesday a blockbuster interoperability deal that will reshape the landscape of the fragmented instant messaging market. The companies will connect their IM networks so users on each can communicate with one another using text and voice chat free of charge.
Starting in the second quarter of 2006, customers of both services will be able to see their friends' online presence, share emoticons, and add new contacts from either Yahoo! Messenger or MSN Messenger to their buddy list.
The agreement marks the first time major players in the highly-competitive IM industry have officially partnered up to enable cross-network communication. Interoperability has always been a hot topic among instant messaging providers, but had never yielded a compromise.
In 1999, Microsoft connected its MSN Messenger client to AOL's AIM network - without authorization. The move let to a cat-and-mouse game of AOL cutting off its new competitor and MSN re-establishing communication with each update. Microsoft eventually gave up and focused on improving its client.
Such disparate messaging networks led to the creation of third party clients with the ability to connect to each simultaneously. AOL and others were initially critical of applications like Trillian, but eventually backed down and ceased efforts to block the newcomers.
"IM interoperability is the right thing for our customers, our businesses and the industry as a whole, and Microsoft is delighted to help lead these efforts with Yahoo," said Microsoft CEO Steve Ballmer in a statement.
"This is truly a turning point for the IM industry," added Yahoo CEO Terry Semel, "and we believe our agreement with Microsoft will help usher in a new era of IP communications."


