• by October 12, 2005

Wire reports today have Yahoo! and MSN teaming up on instant messaging. The AP is reporting that the two Internet giants will make their IM programs compatible with one another, which might prove a threat to America Online. Of course if rumors prove true and Microsoft acquires AOL, what difference would this make?

According to the AP report, an alliance between Yahoo! and MSN on IM would allow consumers who use one or the other of the services to exchange messages seamlessly.

AOL's AIM counted some 51.5 million unique U.S. users in September; MSN's Messenger had about 27.3 million and Yahoo!'s Messenger had 21.9 million, according to Nielsen/NetRatings. Together, Yahoo! and MSN IM have nearly 44 percent of the market, according to Radicati Group, a market researcher. AOL has the lion's share, though--about 56 percent of the market with its AIM and ICQ services combined.

Of course the big IM services also face threats from applications like Trillian and Skype, both of which are gaining market share. And then there's Google, which recently launched Google Talk, a PC-to-PC calling plan.

Stay tuned.