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Microsoft Hooks into AOL, Yahoo for Business IM

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The big three instant messaging providers will start chatting with each other, sort of.

In a deal that breathes new life into the struggling business instant messaging space and raises hopes for full IM interoperability, Microsoft announced it would open its enterprise-focused Live Communications Server 2005 (LCS 2005) to chat networks run by rivals America Online and Yahoo.

It is a strong signal from Microsoft that there is money to be made in the enterprise IM market, even as AOL and Yahoo have retreated from the space. Yahoo recently dropped its Business Messenger IM Service to focus on its free, consumer-focused IM service, while America Online’s plans to stop selling its AIM Enterprise Gateway.

Microsoft’s LCS 2005, currently in beta, provides a standards-based IM platform and real-time collaboration platform specially for businesses. The software giant will pay Yahoo and AOL for access to hundreds of millions of their public IM consumers and resell that access to businesses running LCS 2005.

The connectivity service will be sold as add-on modules within the LCS 2005 product. Pricing and licensing options are expected to be announced in the fourth quarter this year, when the final version of LCS 2005 is released.

While the deal is a win-win for Microsoft, AOL and Yahoo, smaller connectivity players like FaceTime and IMLogic will definitely feel the squeeze. FaceTime and IMLogic hawk network-independent applications that allow real-time communication on any enterprise, private or public IM network.

”This IM connectivity arrangement reflects a shared vision for the potential impact of enterprise IM (EIM) as a productivity tool and platform for the delivery of value-added business services. This combination is the next step in making EIM as widespread and beneficial as e-mail,” Microsoft said in a statement announcing the deal.

According to Microsoft Vice President Anoop Gupta, connectivity with all the major public IM networks was the ”number one request” from enterprise customers testing the LCS 2005 platform.

AOL Vice President of Desktop Messaging Ed Fish said the company would provide routing and network services within LCS 2005, opening the door for businesses to access its tens of millions of home and workplace users.

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