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Knocking on AIM's Door
Pages: 1, 2

Look Ma, interoperability!

AOL has been unruffled by the complaints and attempted hacks, although it has said that it plans to make AIM interoperable within a year -- but first it must tackle the technological challenges of ensuring member security and privacy.

Like any market leader, AOL has no incentive to interoperate or develop standards, as that will only erode its position.

Then in late September, America Online ran a "test" that let people using its ICQ IM product connect to their accounts via AOL Instant Messenger. During the test, people could enter their ICQ usernames and passwords into AIM and send messages through the service. ICQ customers who log on through AIM cannot chat with AIM members, only with other ICQ users. (Despite AOL's acquisition of the ICQ service, the two have remained separate.)



Word of the test leaked out, and AOL downplayed it, calling it R&D, not an alpha or beta test. However brief, the test provoked more controversy. Avner Ronen, a founder of rival company Odigo, used the occasion to publicly accuse AOL of dragging its feet, since the test demonstrated how hollow AOL's argument about security was.

"It's interesting because AOL's strongest defense has always been, 'our tech isn't compatible,'" says David Marks, an analyst with the Gartner Group. "In tech, it's a way of saying they don't want to do it."

"AOL has a long standing MO of keeping its users corralled within its corporate confines, whether it be for content, services, or user interfaces," Marks says. "My take on the situation is that AOL believes that releasing its protocol would expose its users to other (and perhaps superior) IM applications that work on the AOL system."

Marks says a rough analogy might be AOL's stubborn adherence to its browser, despite more advanced products from Netscape and Microsoft. "The inverse of the same strategy applies to allowing non-AOL subscribers using the AOL IM service: it is brand exposure that might help drive traffic and potential subscribers to the AOL sites," he says.

Sitting on the lead

Those may be a couple of good reasons not to open AIM and ICQ, but there are plenty of others.

AOL controls over 90 percent of the IM market, and a lengthy delay won't hurt AOL -- it will hurt Microsoft. Like any market leader, AOL has no incentive to interoperate or develop standards, as that will only erode its position.

The biggest reason is ad dollars. AOL (which some industry wags have dubbed Advertisers on Line) is reaping the profits from a built-in base of 80 million eyeballs in its IM service. If competing IM clients can interoperate, those eyeballs can use any chat client, without viewing the ads on AIM.

Not only that, since AIM's use spreads largely by word of mouth, or what's known on the Web as "viral marketing," the longer AOL holds on to its dominant position, the stronger its position becomes. And now that AOL owns Netscape, the company is probably all too aware of Microsoft's ability to enter a market late but still take it over.

Another advantage is that Web-based chatters will visit and spend more time at AOL.com and ICQ.com (which AOL also owns). In fact both AOL.com and ICQ.com function as portals, with a search engine, e-mail, directory of chat rooms and links to news headlines -- all of which aim to keep people online longer. ICQ also has the potential to become a real-time e-commerce service and has tied it to other communications features, such as Internet phone calling. (ICQ chief operating officer Frederick Singer calls it a "desktop communication portal.") And the Search the Web function on AIM opens aol.com on a browser window.

While dominance on the desktop is bad news for all the small fries in the market, IMUnified thinks that's just the tip of the iceberg:

"The danger of this island phenomenon is an even greater problem when one recognizes that the emerging body of wireless IM users is projected to equal or eclipse the number of PC-based users in upcoming years. This lack of interoperability creates a closed marketplace where users cannot easily move from provider to provider, thus limiting competition in this important market."

You've got merger

Until now, AOL has been able to ignore the shouts of the smaller IM companies. But the impending AOL merger with Time Warner has put the company under greater scrutiny, and the efforts of FreeIM.org (essentially the same companies behind IMUnified) have focused the FCC's attention on IM as a potential problem.

In mid-September, CNET.com cited a source close to the FCC as saying that FCC officials wanted to impose a firm deadline for AOL to open its IM network so that other technologies can communicate with AOL users. Though that may or may not happen, the FCC may be the only organization able to pry open AOL's doors, unless compelling technology comes along.

John Ochwat is a former editor for Upside magazine and contributes to numerous tech publications.


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