As part of Microsoft's plan to pay AOL Time Warner $750 million to settle anti-competitive charges AOL had filed over Microsoft's bundling of its IE browser with its desktop software, the companies agreed to collaborate on a number of projects.
In addition to collaboration on digital media distribution, AOL receives a royalty-free, seven-year license of Microsoft's browsing technology; the two have agreed to work on a number of digital media initiatives, including the use of Microsoft's Windows Media Player software.
In a Thursday afternoon announcement that effectively ended years of open hostilities between the two companies, the IM angle stood out.
After years of shying away from compatibility with other instant messaging networks, AOL indicated that it would consider ways to make its proprietary system compatible with Microsoft's MSN Messenger.
It's a radical change for AOL, which has fought hard to ensure that third parties can't connect to its AOL Instant Messenger network. In early versions of MSN Messenger, Microsoft provided users the ability to sign on to AIM -- but was ultimately locked out of the service by AOL.
While AOL said it would look into the matter, interoperability is far from guaranteed. As part of a settlement of AOL said only that it and Microsoft would "explore ways" to interoperate, and that any compatibility would come about only in a way that would "protect consumer privacy, security and network performance."
That condition has been the crutch on which that AOL has leaned in the past when coming under pressure to open its network to outsiders. Concerns during the America Online-Time Warner merger prompted the Federal Communications Commission to mandate that AOL must either open its systems to exchange messages with unaffiliated third party systems, or prove that it is no longer "dominant" in the IM sector before it can deploy advanced, broadband IM-based services, such as videoconferencing.
As a result, AOL initially said it would work to establish server-to-server interoperability with other IM systems and tested a link to IBM Lotus's Sametime (now Lotus Instant Messaging) enterprise IM system. But the media conglomerate said that the tests proved unfeasible, due to "the state of technology development, marketplace conditions, and the significant resources that would be required to peruse server-to-server interoperability," according to a letter to the FCC from Steven Teplitz, the company's associate general counsel.
If the companies do succeed in establishing interoperability, the change would dramatically revamp the public IM landscape, which so far has been dominated by free, closed networks like AIM, MSN Messenger and Yahoo! Messenger.
For one thing, it would enable AOL to meet the FCC's conditions on deploying those broadband, IM-based services, which its two large competitors each have launched -- bringing the network up to par with rivals' features.
It also could pave the way for the major networks to offer other, specialized IM-based services in an effort to differentiate themselves. AOL confirmed earlier this week that it is looking into scenarios like fee-based IM-centric dating services, an initiative first reported in The New York Times.