Ice broken, MSN, Yahoo users to chat

In the first deal of its kind among Internet rivals, Yahoo and MSN Instant Messaging (IM) users from India and 14 other countries will be able to invite and chat with each other beginning today.

These 15 countries account for over 80 per cent of MSN and Yahoo's combined user base of around 350 million. The other countries will be covered in a phased manner since they have language issues with IMs (for instance, Japan) that need to be sorted out.

IMs are free web-based services that allow users to chat in real time with other users worldwide. There are an estimated 400 million IM users all over the world. Of this user base, MSN has about 240 million while Yahoo accounts for around 110 million.

In a deal that's the first of its kind among Internet rivals, Yahoo and MSN Instant Messaging (IM) users from around 15 countries (including India) will be able to invite, and chat, with each other beginning today. These 15 countries account for over 80 per cent of MSN and Yahoo's combined user base of around 350 million. The other countries will be covered in a phased manner since they have language issues with IMs (for instance, Japan) that need to be sorted out.

IMs are free Web-based services that allow users to chat in real time with other users worldwide. There are an estimated 400 million IM users worldwide. Of this user base, MSN has about 240 million users while Yahoo accounts for around 110 million. In India, MSN and Yahoo together are said to account for over 70 per cent of all IM users. Some experts predict that IM traffic will exceed email traffic over the next one year. 

Worldwide IM users: 400 mn 
MSN, Yahoo combined IM base: 350 mn 
Both account for over 70% IM usage in India 
MSN has 61% worldwide IM marketshare: Comscore 
By 2010, 90% users with business email accounts will have IT-controlled IM accounts: Gartner 
IM traffic may exceed email traffic over the next one year

The deal was supposed to have taken off last year but there were engineering issues to get both the IMs on the same network. Analysts say the deal will create a user base that will rival that of America Online (AOL) and create hurdles in Google's plan (Google Talk) in the IM space.

"Microsoft and Yahoo are publicly beta testing interoperability, enabling users of Windows Live Messenger and Yahoo Messenger to connect with each other. This interoperability - the first of its kind between two distinct, global consumer IM services - will form the world's largest consumer IM community," confirms Jaspreet Bindra, Country Manager, MSN India.

A recent study from digital research firm ComScore notes that in terms of brands, the MSN Messenger application has the strongest penetration worldwide, with 61 per cent of worldwide IM users utilising the application.

North America is the most competitive IM market, with MSN Messenger, AOL/Aim and Yahoo Messenger each garnering between 27- and 37 per cent of IM users.

"Interoperability between these two IMs will give users the ability to exchange instant messages, see contacts online, file sharing upto 1MB (on Yahoo Messenger), share select emoticons and connect with a global community of friends through one safe and secure IM experience," says George Zacharias, MD of Yahoo India.

Being able to message instantly between IM communities is one of the features most requested by MSN and Yahoo messenger users, note Bindra and Zacharias. In addition to exchanging instant messages, consumers from both communities will be able to see their friends' online presence, share select emoticons (these will be upgraded periodically), and add new contacts from either service to their friends' list, all as part of their free IM service.

Will this lead to a larger deal between Yahoo and Microsoft (there are global rumours of Microsoft taking a stake in Yahoo which have been dismissed by both companies)? Besides, Microsoft had even considered a mega-merger like this with AOL earlier. Both the company spokespersons dismiss such conjectures.

"We compete and collaborate in many areas. This should be seen as a specific project requirement wherein we have moved faster that any other company," says Zacharias. "Industry leaders have to co-operate and our users have been asking for interoperability for quite a while. We felt it's time to give it," concurs Bindra.

Given this is a beta version, when will we see the final version? "As with every beta version, the pubic will keep on coming back to us with suggestions and we will keep on upgrading it. There's no real time frame," says Bindra.