washingtonpost.com Software Aimed at Blocking VeriSign’s Search Program

By Anick Jesdanun AP Internet Writer Tuesday, September 16, 2003; 4:00 PM

NEW YORK — The developer of software that essentially guides Web surfers sought Tuesday to neutralize a controversial service designed to help users who mistype Internet addresses.

The Internet Software Consortium, the nonprofit organization that develops BIND software for Internet domain name directories, is writing an “urgent patch” for Internet service providers and others who want to block customers from a new Site Finder service from VeriSign Inc.

VeriSign, which keeps the master lists of names ending in “.com” and “.net,” launched Site Finder on Monday to steer users to likely alternatives when they type addresses for which no Web site exists.

Though VeriSign gets unspecified revenues from search engine partners whose technology powers Site Finder, company officials described the service as primarily a navigation tool to help lost Internet users.

Critics, however, say the service eliminates user choice, gives a private company too much control over online commerce and could violate longstanding Internet standards.

VeriSign’s service, which affects only “.com” and “.net” names, also overrode similar services offered by several Internet service providers, including America Online, and through Microsoft Corp.’s Internet Explorer browser.

The BIND patch allows AOL and others to restore control by identifying and then ignoring data from Site Finder, said Paul Vixie, president of the Internet Software Consortium.

When the patched software receives such data, it will instead pass along an “address not found” message.

“We’re making this patch available because our customers are screaming for it,” Vixie said.

Though running the software update is optional, Vixie expects many customers will. The consortium was testing the patch Tuesday and planned to release it by Wednesday.

VeriSign officials did not immediately return calls Tuesday. On Monday, its vice president for naming services, Ben Turner, said service providers were free to configure their systems so customers would bypass Site Finder.

BIND, a free product, is used by most domain name servers at service providers, corporations and other networks. Typically, those servers keep temporary copies of the master directories obtained from VeriSign.

VeriSign estimates that people mistype “.com” and “.net” names some 20 million times daily and cites internal studies showing users prefer navigational help over a generic error message.

Earlier this year, a suburban Washington company called Paxfire Inc. tested a similar service for “.biz” and “.us” names, but the U.S. government and a private oversight board asked Paxfire to suspend it after a few weeks pending a review, Paxfire chairman Mark Lewyn said.

A similar feature exists with “.museum” names. People who type in nonexistent addresses are offered an index of museum sites.

– Is AOL getting the right to offer Video and other advanced features, or – Is AOL no longer obligated to work toward allowing competitors to use their network? – Or both?

Frankly I have no problem with AOL innovating on top of their service.. I think it’s good for the industry and this limitation has caused them to lose market (such as it is) to other folks like EyeBallChat. But AOL, MSN, Yahoo et al should be mandated to interoperate as it benefits all parties to have a massive, interoperable network of networks.

The FCC shouldn’t have singled out AOL, but unfortunately AOL were the only guys who were merging at the time and this gave the FCC a lever.

-Ian.

—— http://story.news.yahoo.com/news?tmpl=story&cidX2&ncidX2&e=1&u=/nm/ 20030819/wr_nm/tech_aol_dc

Source: FCC to Lift AOL Instant Messaging Condition 2 hours, 7 minutes ago

NEW YORK (Reuters) – U.S. regulators are expected to allow AOL Time Warner Inc. (NYSE: AOL -news ) to offer advanced instant messaging ( news -web sites ) services without opening its systems to rivals, a source familiar with the matter said on Tuesday.

The Federal Communications Commission ( news -web sites )’s expected decision would lift a condition imposed on the 2001 merger of America Online and Time Warner.

AOL Time Warner, operator of the world’s biggest online service, in April asked the FCC ( news -web sites ) to lift the condition that precludes it from offering advanced services such as live streaming video.

FCC officials were not immediately available for comment.

Another source familiar with the decision said the FCC vote is 3-2 in favor of lifting the condition.

AOL Time Warner has said the instant messaging market had become more competitive.

“We think we made a compelling case,” said company spokeswoman Tricia Primrose. “We hope the FCC decision will be out soon and that we get a favorable result.”

Instant messaging is a popular Internet function that allows individuals or groups to have real-time text discussions, but providers have been developing more advanced services to lure more customers.

Possible offerings include live video and audio while chatting in real time.

AOL has already planned to offer the ability to send recorded video clips and have voice conversations through instant messaging in the next version of its online service, AOL 9.0.

The software will not feature live streaming video at its September launch.

When the FCC approved America Online’s purchase of media conglomerate Time Warner in 2001, the agency barred the new company from offering advanced instant messaging services like live streaming video until they work with other services or AOL Time Warner proves the ban is no longer necessary.

> From: Gregory Alan Bolcer
> Date: Sat May 31, 2003 3:57:02 PM US/Pacific
> To: FoRK
> Subject: Re: waste testbed
> Reply-To: gbolcer [at] endeavors [dot] com
>
> Wow. Deja Vu all over again. Those dang
> Nullsofter’s causing the exact same problems they
> did 3 years ago.
>
> Greg
>
> Elias Sinderson wrote:
>>
>> Part 1.1 Type: Plain Text (text/plain)
>> Encoding: 7bit
>>
>> AOL pulls Nullsoft file-sharing software
>> By Jim Hu
>> > e-sharing%20software>
>>
>> Staff Writer, CNET News.com
>> May 30, 2003, 2:06 PM PT
>> http://news.com.com/2100-1032-1011585.html
>> <3189 https://ianbell.com/2002/12/19/aol-patents-im/ Fri, 20 Dec 2002 03:27:12 +0000 secure chat > applications]]> https://ianbell.com/2002/12/19/aol-patents-im/ From: “Mr. FoRK” > Date: Thu Dec 19, 2002 9:05:58 AM US/Pacific > To: > Subject: AOL patents IM? > > > http://story.news.yahoo.com/news?tmpl=story&ncidX1&e=1&cidX1&u=/ > nm/20021 > 219/tc_nm/tech_internet_aol_dc > > Patent > Thu Dec 19, 8:56 AM ET Add Technology – Reuters to My Yahoo! > By Bernhard Warner, European Internet Correspondent […]]]> Begin forwarded message:

> From: “Mr. FoRK”
> Date: Thu Dec 19, 2002 9:05:58 AM US/Pacific
> To:
> Subject: AOL patents IM?
>
>
> http://story.news.yahoo.com/news?tmpl=story&ncidX1&e=1&cidX1&u=/
> nm/20021
> 219/tc_nm/tech_internet_aol_dc
>
> Patent
> Thu Dec 19, 8:56 AM ET Add Technology – Reuters to My Yahoo!
> By Bernhard Warner, European Internet Correspondent
>
> LONDON (Reuters) – Media giant AOL Time Warner has quietly won a U.S.
> patent
> for instant messaging (news – web sites), a potential goldmine as the
> online
> activity rivals mobile phone text-messaging as the most popular new
> communication tool.
> The patent, issued in September, grants AOL’s instant messaging
> subsidiary
> ICQ broad ownership rights to the technology, which enables users to
> chat
> quickly and cheaply across the Internet.
> The broad wording of the patent means AOL could get an important legal
> leg
> up on rivals Microsoft Corp. and Yahoo, the other players in the
> potentially
> lucrative instant messaging (IM) arena that have their own proprietary
> technologies.
> AOL has offered little comment on the patent or whether it intends to
> enforce it.
> “There are no plans to do anything with the patent at this time,” a
> London
> spokesman for AOL’s Internet division, America Online, told Reuters on
> Thursday.
> Microsoft and AOL have recently embarked on a project to develop
> secure chat
> applications for corporate users, the first major effort to cash in on
> what
> has been a largely free software tool. Reuters Group is one of the
> biggest
> corporate clients, using Microsoft’s IM technology.
> AOL has scores of other technology patents, including one for Internet
> browsing memory tags, or “cookies,” and another for Secure Sockets
> Layer
> (SSL), an application that secures e-commerce transactions. But it has
> never
> sought to enforce these.
> It has, however, been notoriously protective of its IM technology. It
> did
> not permit rivals’ proprietary IM applications to communicate with its
> own
> AOL Instant Messenger (AIM) and ICQ for years. It now allows this,
> albeit in
> a limited fashion.
> The new patent defines AOL’s IM application as one that enables users
> to
> chat with and identify one another across a specific “communications
> network,” opening up the possibility for AOL to collect royalties from
> rivals.
> Developed in the mid-1990s by a group of Israeli technologists at a
> company
> called Mirabilis, ICQ was the first breakthrough chat application. It
> filed
> a patent for its technology in 1997 and was acquired by AOL in 1998
> for $287
> million.
> AOL said it has 180 million registered AIM users and 140 million
> registered
> ICQ users. The company said 2.1 billion instant messages were sent
> across
> its network daily.
>

———–

Genuity Files for Bankruptcy Protection Wed Nov 27,10:22 PM ET Add Technology – AP to My Yahoo!

By JUSTIN POPE, AP Business Writer

BOSTON (AP) – Internet backbone company Genuity Inc. filed for bankruptcy protection Wednesday as part of an agreement that will transfer its assets to Level 3 Communications Inc. for $242 million.

Genuity, which operates one of the key components of the infrastructure that supports the Internet, became the latest high-profile telecommunications company to file for bankruptcy protection, following WorldCom, Global Crossing and others.

Genuity’s fall into bankruptcy began in July, when Verizon Communications said it would not exercise an option to regain control of the Broomfield, Colo.-based company, putting Genuity in default of a $2 billion line of credit.

Genuity, Verizon and lenders negotiated for months, and Genuity managed to pay back more than $200 million, but ultimately failed to negotiate a settlement that avoided bankruptcy.

The companies said Level 3 would operate Genuity as a separate business still based in Woburn, Mass. If the plan is approved by a U.S. Bankruptcy Court judge, creditors would receive Level 3’s $242 million. They would also get any cash left over on Genuity’s balance sheet after it funds operations. The company currently has $800 million in cash.

“This was triggered by Verizon’s decision, because of changing business needs and market conditions … not to exercise their option on Genuity,” Paul R. Gudonis, Genuity’s chairman and chief executive officer said in a telephone interview.

Genuity shares fell 43 percent, or 20 cents, to 26 cents each on the Nasdaq Stock Market. Level 3 shares rose 8 percent, or 41 cents, to $5.60 each.

Federal regulators required GTE and Bell Atlantic to spin off Genuity as part of their merger agreement two years ago, but said the new company, Verizon, could maintain a stake and take back Genuity by 2005 under certain conditions.

Verizon, facing an already glutted market for networking capacity, declined.

Besides Verizon, Genuity’s biggest customer is America Online, which uses Genuity’s network for both its dial-up and high-speed DSL service, though the share of Genuity’s total revenue from AOL has fallen, from 52 percent in 1999 to 35 percent of the $1.2 billion it brought in last year.

Gudonis said customers would feel no impact from the bankruptcy filing and acquisition.

But, he said, more layoffs were likely. Genuity has laid off more than 3,000 workers, and revenues for its most recent quarter were $222 million, down almost a third from a year ago.

He declined to speculate about his own future.

“My responsibility is to lead the company through this acquisition to the benefit of our creditors, customers and employees,” he said. “After that, it’s just inappropriate to talk about my personal plans.”

The AOL business and Genuity’s other assets now fall into the hands of Level 3, which has its own 20,000-mile broadband fiber-optic network.

———–

The problem is Time Warner Cable. It’s doubtful that any U.S. RBOC wants to talk to AOL because of the fear of creating an 800-lb. gorilla that also has Cable assets. ILECs hate their cable counterparts. Moreover, they fear them.

So, one might think that the logic is to spin off or sell off Time Warner Cable. But wait — isn’t that a profitable business? Can’t do that right now… the mother ship needs to maintain as much margin as it can for reporting.

Hmm… maybe they should spin off AOL. Now, since it was AOL that actually bought all the other assets in the first place, wouldn’t that be ironic?

🙂

-Ian.

—- http://story.news.yahoo.com/news?tmpl=story&ncidX2&e=3&cidX2&u=/nm/ 20021122/wr_nm/media_parsons_dc

AOL Time Warner CEO to Sullen Execs: ‘Get Over It’ Fri Nov 22, 6:58 PM ET

Add Technology – Reuters Internet Report to My Yahoo!

By Reshma Kapadia

NEW YORK (Reuters) – “Get over it.” That is what AOL Time Warner Inc. (NYSE:AOL – news) Chief Executive Richard Parsons has told company executives angered by the decline in the media giant’s stock price as he tries to refocus them on the future.

Some employees inside the world’s largest media company could be characterized about six months ago as “sullen but not mutinous” amid disappointment over AOL’s $106.2 billion purchase of Time Warner but now many of them are moving to acceptance, Parsons said at a Variety media conference here.

Parsons said he has had various conversations with executives who feel they have been “screwed” by the deal as the value of their portfolios and options sink amid the 55 percent drop in the company’s stock this year.

“I say to them you have to get over it because you can’t go back and undo the past,” Parsons said. “The challenge we all have is how to figure out how to build value back in the company. If you really really can’t get past that, then you have to go somewhere else.”

The company has suffered from weakness at its America Online unit, which has been mired in slow advertising spending and subscriber growth and federal accounting probes, as well as the failure to deliver on the promises made after the merger.

Many AOL Time Warner employees have left, especially AOL veterans, but Parsons said the company is making progress on priorities he set out this summer including regaining credibility with investors, simplifying the company and fixing America Online.

“Getting (AOL) back on track –stabilizing the business and putting it back on the growth track — we think we are at a point where we have confidence we can do that,” Parsons said, ahead of a Dec. 3 meeting when executives try to convince Wall Street. “But then there is the execution part.”

TASTES GREAT, LESS FILLING

Going forward Parsons said the priorities include running the businesses well and improving collaboration between the divisions — from America Online, music and publishing to the networks, film and cable systems — instead of each unit’s management trying to protect their own profit/loss.

“To some extent this is a tough turn to make because the media either wants to put you in two categories: it tastes great or it’s less filling,” Parsons said. “What we need to do is run business and run well and extract additional value out of the portfolio of businesses. That’s the challenge for us.”

Much has been said about the company’s failure to date of getting its many fiefdoms to work together, but Parsons said AOL Time Warner has to create an understanding of what it is trying to achieve overall so each unit understands — instead of forcing “synergies” down each division.

“We can’t order them (to collaborate), but can we make the case to employees that if they do things this way the result will better for all,” said Parsons, often characterized in the industry as a consensus builder.

Avoiding deals that would complicate its corporate structure and reducing its $28 billion in debt are also Parsons’ priorities as he tries to turnaround the company.

Parsons, a former Time Warner veteran who took the helm this summer after Gerald Levin resigned, sought to distance himself a bit from his predecessors.

He acknowledged that he had some doubts about the 30 percent growth targets set out after the merger — the targets the company severely missed and that have led to much of the investor discontent.

“(In the 1990s) growth became this enormously important thing and (people) would throw out growth targets without looking at what was under that. You can’t grow a company our size with $40 billion in revenue and a target of growing it 30 percent a year. That’s not the real world (news – Y! TV).”

———–

-Ian.

—— http://www.cnn.com/2002/TECH/internet/10/17/aol.discs/index.html Campaign: Send AOL CDs back

From Rusty Dornin CNN

EL CERRITO, California (CNN) –Don’t know what to do with all those unwanted America Online compact discs that scream “Sign on today”?

Jim McKenna and John Lieberman say they have the answer: Send them back. In an effort to get AOL, part of CNN’s parent company, to stop sending the CDs, the two men started a Web site asking people to send the discs to them.

Once the two have collected a million discs, they say they’ll drive them to AOL’s headquarters in Virginia and dump them at the Internet giant’s door.

“We’re going to AOL and say, ‘You’ve got mail. Please stop this,'” McKenna said.

AOL is not the only company that sends out the free CDs, which entice customers with offers of over 1,000 hours of free Internet access. The marketing strategy also is used by AT&T, Earthlink and others.

But AOL — with 35 million subscribers worldwide — uses the tactic most frequently. The AOL discs appear in magazines, at the movies, in the mail and at parties, but an AOL spokesman wouldn’t say how many discs are sent out every year. The spokesman did say that customers who aren’t happy about getting the CDs can send them back so the company can recycle them.

McKenna and Lieberman are getting a little help for their cause from a waste management company, which publicized their campaign in a recent newsletter.

“You’re wasting a lot of natural resources,” said landfill manager Janet Schnyder. “You’re causing pollution and you’re basically sending something that people don’t want.”

They launched their campaign after going to the video store one night and getting an AOL disc with their rental. Then when they got to Lierberman’s house there was another disc waiting in the mailbox, complete with plastic wrap and additional packaging. All of it added up to a lot of garbage.

“We thought, ‘You know. Somebody’s got to do something about it,'” McKenna said. Having fun

Their Web site has brought in about 70,000 CD’s from as far away as Brazil and Africa. In the process, the two are having a lot of fun.

Their homepage shows pictures reportedly sent in by frustrated disc recipients. There’s a snapshot of a room wallpapered with the CDs and another of a dog with a disc clenched in its jaw.

This “pooch can’t stand it when the unsuspecting postal worker drops off another unwanted AOL CD,” the site says.

McKenna and Lieberman scratch the CDs so they can’t be sent out again and then they loop them on string — giving the unwanted discs the appearance of giant strands of silicon. The two stress they are not anti-AOL.

“We’re not defaming AOL or the corporation or anybody that does business with them,” McKenna said. “We are asking them politely to stop. And we’re just doing it in a creative way.”

Find this article at: http://www.cnn.com/2002/TECH/internet/10/17/aol.discs/index.html

———–

NEW YORK (AP) – AOL Time Warner Inc. is buying out AT&T Corp.’s stake in their cable television, moviemaking and programming partnership for an estimated $8.5 billion to $9 billion, and said it may sell a stake in its cable TV operations in an initial public offering as early as next year.

The deal announced Wednesday involves the decade-old Time Warner Entertainment partnership, which includes most of AOL Time Warner’s cable TV systems and its Warner Bros. film studio, its Home Box Office pay-TV service and other programming businesses.

The two sides have been in discussions for some time on unwinding the partnership known as TWE. AOL Time Warner owns about 72.4 percent of the partnership, and AT&T owns the rest.

The deal gives AT&T cash and readily saleable assets, while AOL Time Warner avoids having to buy its partner out for cash at a time when it is struggling under a heavy debt.

In morning trading on the New York Stock Exchange ( news – web sites), shares of AOL Time Warner rose 69 cents to $14.05, while AT&T gained 54 cents to $11.72.

Under the terms of the deal, AT&T gets $2.1 billion in cash and AOL Time Warner stock valued at $1.5 billion, as well as a 21 percent stake in the Time Warner Cable Inc. business in exchange for its stake in TWE.

While AOL Time Warner didn’t affix a value to the cable stake, The Wall Street Journal said it would boost the total value that AT&T is getting in the deal to between $8.5 billion to $9 billion.

For its part, AOL Time Warner gets full ownership of Warner Bros. and HBO and stakes in the TV channels Comedy Central, Court TV and The WB Network.

In addition, AT&T and Comcast have agreed to make America Online’s high-speed version of its Internet service available on Comcast’s cable systems. That type of arrangement could give AOL access to more customers.

The stake in the cable business should benefit Comcast Corp., which is buying AT&T’s cable TV businesses and would inherit AT&T’s stake in TWE. The former Time Warner created the TWE partnership in 1992.

The cash, AOL stock and Time Warner Cable shares will go to Comcast if that company completes its AT&T cable operation before year’s end, which is expected.

AT&T and Comcast will get an immediate influx of cash and will be able to sell its stakes in both AOL Time Warner and the new cable business in the future to generate more money.

AOL Time Warner chief executive Dick Parsons said the deal was “the best possible outcome for our investors” and will simplify its overall structure.

“AOL Time Warner will recapture total ownership and control of its content businesses, enabling us to manage this portfolio of assets for maximum value. And all of the company’s state-of-the-art cable assets will be combined for the first time into a well-capitalized, pure-play cable company,” he said.

AOL plans to conduct an initial public offering of part of its stake in the Time Warner cable business soon after the restructuring in completed in early 2003.

That would enable it to pay down the debt incurred in making the $2.1 billion cash payment to AT&T, AOL said.

“The fact is that AOL or Time Warner has had managerial control of all of the assets within TWE since 1999,” said Katherine Styponias, an analyst at Prudential Securities. “So it’s not as if being completely owned by AOL is going to mean things are going to change radically. Nevertheless, it’s one less thing to worry about when trying to put a value on the company.”

———–

Of course, neither IIA nor eVoice could be held responsible for how their acquirer accounted for the purchase cost or what AOL did with their revenues. Fortunately, eVoice had no revenue to speak of so that helps things a little..

-Ian.

—–

http://www.nytimes.com/reuters/technology/tech-media-aol- restructuring.html

AOL Restructures Business Affairs By REUTERS

Filed at 4:36 p.m. ET

NEW YORK (Reuters) – The first target of a major restructuring at the online division of AOL Time Warner Inc.(AOL.N) is the business affairs operations of America Online, whose accounting is at the center of federal inquiries, a company source said on Thursday.

The deal-making group struck many of AOL’s advertising and commerce pacts that are now the subject of an internal review as well as inquiries by the U.S. Securities and Exchange Commission and Justice Department.

After standing by AOL’s accounting for weeks, AOL Time Warner disclosed on Wednesday that AOL may have overstated revenue in three deals totaling some $49 million over a period of about 18 months. The disclosure came as a caveat as the media giant’s top executives certified its financial results.

AOL’s shares closed up more than 7 percent, or 81 cents, at $11.85 on Thursday as investors breathed a sign of relief that the disclosure so far was not bigger.

“It seems the disclosures were fairly benign in the grand scheme of things and you would think this was their last opportunity to get any skeletons out of the closet,” said Jon Friedland of investment firm porter Felleman.

The top brass of hundreds of America’s biggest companies swore by their financial results on Wednesday under a government order meant to reassure investors.

AOL Time Warner has begun an internal review of AOL’s deals, which is seen completed by the end of the third quarter.

Chief Executive Richard Parsons said in a memo Wednesday that Time Warner veteran Don Logan and new AOL chief Jon Miller planned to implement a new structure for AOL in a few weeks.

“There is no room at this company for any unethical behavior,” Parsons said in the memo, encouraging employees to raise concerns about conduct to supervisors.

OVERHAUL COMES AFTER LEADER OUSTED

The overhaul of the online division comes as weakness at AOL, once called the company’s “crown jewel,” has offset growth at AOL Time Warner’s other branches such as film and cable.

The business affairs restructuring comes in the wake of the ouster of its former head, David Colburn. A company source said Colburn, a brash, aggressive AOL veteran that set the tone for the group, was on his way out as Miller began reviewing the organization, but the disclosures accelerated his exit.

Lance Conn, a senior vice president for AOL’s business affairs, who most recently was working in Europe, last month was given many of Colburn’s responsibilities.

The restructuring of the deal-making group, which had topped 100 employees and was known as a close-knit, hard-hitting bunch, will likely decentralize it and shift many of its employees to other units, a company source said.

As the new team reviews how to run the AOL, some of the changes implemented in the early days of the merger could be dismantled, industry insiders said. At that time, the focus was on creating synergies and selling advertising across all of AOL Time Warner’s properties.

“It’s going to be more from a strategic perspective on how to approach the ad and commerce business,” said CIBC analyst Mike Gallant.

Several AOL veterans have already left or taken a back seat — including top ad man Myer Berlow — and others may yet leave as part of the pending shake up.

MORE DISCLOSURES ON TAP?

Even though AOL’s shares rose, some analysts recommended investors stay on the sidelines, citing the possibility AOL may uncover more cases of inappropriate revenue recognition.

“They were under pressure to meet their certification deadline; they found language they wanted to use to couch their certification,” said Jacob Frenkel, an attorney at Smith, Gambrell & Russell and former SEC lawyer. “Until the internal investigation is complete, you do not know.”

The three deals AOL discovered were not part of the transactions discussed in a series of Washington Post articles last month that caught regulators’ attention, the source said. The company declined to comment on details of the deals.

The deals highlighted in the Washington Post, which were struck in 2000 and 2001, totaled about $270 million and showed, for example, how AOL sold ads on behalf of eBay Inc.and then booked the sale of those ads as its own revenue.

“If that’s the only bullet I’ve got to take, I can live with that,” Gallant said. “But I just can’t get comfortable that the issue is behind us because they are continuing to review all their ad and commerce transactions and the SEC and DOJ investigation continues.”

———–

> 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
>
>
> http://xent.com/mailman/listinfo/fork

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