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Begin forwarded message:

> From: “Jim Whitehead”
> Date: Tue Jul 23, 2002 01:27:06 PM US/Pacific
> To: “FoRK”
> Subject: AOL scaling back IM interoperability
>
> I suppose the main surprise here is that AOL is coming clean at
> all. After
> all, its long-running game of talking interop, and doing
> everything possible
> to prevent open standards in this arena, seemed to have been
> working fine,
> with most end users completely oblivious to AOL’s actions.
>
> http://www.quicken.com/investments/news/story/djbn/?story=/news/stories/dj/
> 2
> 0020723/ON20020723000833.htm
>
> America Online Scales Back Instant-Messaging Compatibility Efforts
> Updated: Tuesday, July 23, 2002 01:23 PM ET
>
> Dow Jones Newswires
>
> NEW YORK — America Online appears to be scaling back efforts to
> make its
> instant-messaging service compatible with rival services.
>
> The unit of AOL Time Warner Inc. (AOL, news, msgs) said in a regulatory
> filing it is now focusing on messaging interoperability methods
> that are
> more limited in scope than the kind envisioned by the Federal
> Communications
> Commission when it approved the AOL-Time Warner merger in January 2001.
>
> America Online isn’t required to make its messaging system
> interoperable
> with others, but the FCC’s merger approval included what it
> considered to be
> incentives for the company to do so. It also required AOL to file
> progress
> reports on its interoperability efforts every six months. The most
> recent
> report, filed last week, disclosed the company’s new direction.
>
> The upshot of the strategy shift is that the instant-messaging
> market isn’t
> much closer to broad-based interoperability than it was 18 months ago,
> according to industry analysts. Unlike e-mail, users of most competing
> instant-messaging services still can’t directly trade messages. So an
> America Online instant- messaging user can’t communicate with a user of
> Microsoft Corp.’s (MSFT, news, msgs) MSN Messenger, except by using
> third-party software such as Trillian.
>
> America Online, the biggest instant-messaging provider, has been
> criticized
> for blocking users of rival services from gaining access to its
> users. The
> company also has been accused of dragging its feet amid industry
> attempts at
> interoperability.
>
> For its part, America Online has said it wants to protect the
> security of
> its users and the reliability of its system. And it points out
> that other
> companies have so far failed to agree on interoperability standards.
>
> When the FCC approved the AOL-Time Warner merger, it said that if
> America
> Online wanted to offer video-conferencing and other advanced
> instant-messaging features over Time Warner’s cable lines, it
> first had to
> enable its instant- messaging users to communicate with users of rival
> services. The intent of the condition was to prevent America
> Online from
> widening its dominance of the instant-messaging market by
> exploiting its
> access to Time Warner cable systems.
>
> AOL hasn’t yet introduced video features, even though rivals
> Microsoft and
> Yahoo Inc. (YHOO, news, msgs) did so last year.
>
> Specifically, the FCC said America Online would have to implement a
> technology known as “server-to-server interoperability” before it could
> offer video. The technology would allow users of non-America
> Online services
> to detect when AOL users are online, and to trade messages. It
> would do so
> via communications between the computer servers operated by each
> messaging
> provider, using a common language.
>
> But in the progress report filed with the FCC last week, America
> Online said
> it will “focus its efforts” on alternatives to server-to-server
> interoperability. They are more limited in scope than server-to-sever.
>
> As an example of an alternative, America Online cited a recent
> agreement to
> make its instant-messaging service compatible with a new messaging
> service
> from Apple Computer Corp. (AAPL, news, msgs). The Apple service,
> IChat, will
> be included in Mac OS X 10.2, the new Apple operating system set
> for release
> in August.
>
> IChat users will be able to talk to America Online users, but it won’t
> involve server-to-server interoperability. Instead, the actual
> exchange of
> messages will occur only on America Online’s servers, even as IChat
> customers use Apple software.
>
> “We believe this kind of hosted IM solution provides, at least in
> the short
> term, a secure, reliable and cost-effective means to provide
> interoperability between AOL, IM and unaffiliated IM communities,”
> Steven
> Teplitz, AOL’s associate general counsel, wrote in the progress
> report to
> the FCC.
>
> As to the apparent change in strategy, company spokeswoman Kathy
> McKiernan
> said Tuesday: “It’s a recognition that server-to-server has proven
> a hard
> nut to crack for the entire industry.” Indeed, users of America
> Online’s
> rival services can’t directly communicate with each other, either.
>
> The alternative solution “was something that we could implement now to
> provide for IM communities to communicate,” said Ms. McKiernan, adding
> America Online would explore partnerships with other messaging
> providers,
> similar to the Apple deal. None has been announced so far.
>
> FCC officials couldn’t be reached Tuesday.
>
> America Online hasn’t ruled out the possibility that it would someday
> implement server-to-server interoperability. The company has
> explored the
> technology in the past, including a server-to-server last year
> with Lotus
> Development, a unit of International Business Machines Corp. (IBM,
> news,
> msgs).
>
> But America Online’s interoperability test with Lotus was “limited
> in scope
> and functionality.” True server-to-server technology “would
> require further
> significant expenditures of time and resources to develop,” wrote Mr.
> Teplitz.
>
> The Internet Engineering Task Force, a group devoted to developing
> Internet
> standards, has been working on a server-to-server messaging
> technology but
> hasn’t yet developed a final version, according to America Online. Task
> force representatives couldn’t be reached.
>
> The company’s strategy shift means that true interoperability in
> instant
> messaging is still a couple of years away, according to Michael
> Gartenberg,
> analyst with Jupiter Research.
>
> “It’s still something the market wants,” he said. “At some point, it’ll
> happen, but maybe a couple of years down the road.”
>
> Mr. Gartenberg and other analysts believe America Online hasn’t
> actively
> pursued true interoperability because it wants to protect its
> large user
> base. If messaging systems were compatible, the company could lose
> ground
> because prospective customers might see no difference in choosing
> another
> provider, as long as they can reach America Online users.
>
> But partly because of its lack of compatibility and the FCC conditions,
> America Online hasn’t kept up with rivals in offering new
> services. MSN and
> Yahoo have had video-conferencing via instant-messaging since last
> year. AOL
> has denied that it has held back on video messaging to avoid making its
> system interoperable, arguing there is little consumer demand for it.
>
> But the new features have paid off for the company’s rivals, and
> they are
> catching up. Between last October and April, Microsoft’s Messenger
> user base
> rose 32% to 29.1 million, according to ComScore Media Metrix,
> while Yahoo’s
> base jumped 19% to 19.2 million users. In the same period, the
> number of
> users of AOL-branded messaging services increased 7% to 54.9 million.
>
>
> -Peter Loftus; Dow Jones Newswires; 201-938-5267;
> peter.loftus [at] dowjones [dot] com
>
> Copyright 2002 Dow Jones & Company, Inc.
> All Rights Reserved
>
>
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