Yahoo, Microsoft Beef Up IM Tools

— June 22, 2006

As the battle for Instant Messaging market share heats up, Microsoft and Yahoo are upping the ante with new and improved communications services. While Microsoft is touting its Windows Live service with the release of its glorified Messenger, Yahoo is pushing plug-ins with its new beta.

Microsoft on Monday released Windows Live Messenger, the next generation of MSN Messenger. Going a step beyond text IM, Windows Live Messenger incorporates free PC-to-PC calls and video calling. It also acts as a window to the Internet, connecting people to their email, blogs, search and other Windows Live services with one click of the mouse.

"The launch of Windows Live Messenger represents a significant 'down payment' on the Windows Live vision and an important milestone for the business," said Martin Taylor, corporate vice president of Windows Live and MSN at Microsoft.

Evolutionary Step

JupiterResearch analyst Joe Wilcox considers Microsoft's latest upgrade more of an evolutionary step. The new service offers some refinements, and could play a significant role within the greater sphere of Windows Live services, he said, but it is not revolutionizing IM.

"A lot of what's included in Windows Live Messenger looks fairly familiar. In many respects, this is little more than MSN Messenger rebranded with a few new features," Wilcox told TechNewsWorld. "This is just another small step forward."

Yahoo's Beta Play

Meanwhile, Yahoo introduced a new beta of its Yahoo Messenger with Voice service on Tuesday, complete with custom plug-in features. Plug-ins are free mini applications that can be added to software, like IMs and browsers, to make it more personal and interactive.

Yahoo Messenger with Voice has opened up its Application Program Interfaces (APIs) to encourage external and Yahoo developers to build plug-ins for the community. An Amazon.com plug-in, for example, lets users share their Wish Lists with friends and family and an eBay plug-in lets them stay on top of their bidding activity throughout the day.

"The new plug-ins for Yahoo Messenger with Voice empower people to create the communications experience they want by giving them a way to customize their IM service with their favorite Web features and services," said Brad Garlinghouse, senior vice president of communications, community and front doors at Yahoo.

Plug-In Appeal

The plug-in approach has appeal, Wilcox said, because it offers advantages to the software provider and its customers. Yahoo has the opportunity to position its IM service as a platform that developers build on. Customers, on the other hand, can add elements that personalize the software and eliminate "extra baggage." Wilcox likens this to Mozilla's approach with Firefox.

"Firefox is a fairly lean, fast browser that is extended through plug-ins. The user picks just the plug-ins they want and gets the browser they want rather than getting what the publisher decides to give them and having to turn off certain features," Wilcox said. "Having all that extra code you don't want can affect the software's performance."

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