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Jesse Berst, Editorial Director
ZDNet AnchorDesk
I have an idea for a new Olympic event:
The
Software Monopolist Relay
. . . Ladies and gentlemen, the baton
has just been handed to AOL CEO Steve Case . . . And look at him
go!
Most eyes were on Microsoft yesterday after
the U.S. Supreme Court said a lower court should hear the company's
antitrust lawsuit appeal first.
Microsoft and some Microsoft supporters think
it was a victory. I have my doubts, but I'm not going to go into
that now. While everyone was watching Microsoft, something bigger
happened.
The Wall Street Journal reported that America
Online is quietly creating an instant messaging juggernaut big enough
to make Bill Gates drool. Many users of instant messaging service
ICQ, which AOL bought two years ago, can now use AOL Instant Messenger
(AIM).
This means AOL is creating an instant messaging
system with as many as 138 million users, and which won't operate
with any other instant messaging service, including Microsoft's
MSN Messenger.
Today I'll restate my call to sue AOL now
(click for more) and tell you why the courts may be the only recourse
against Steve Case, a monopolist for the new millennium. First,
lets take a good look at the IM market and AOL's role.
IM Landscape
AOL created Instant Messenger 11 years ago and now boasts
65.5 million users. AOL-owned ICQ now has 73 million users. Each
one of these services alone has more than three times the number
of users of the nearest competitor.
AOL refuses to allow other instant
messaging services to interoperate with either AIM or ICQ. To date,
no one has created an instant messaging service that AOL has not
blocked, although many have tried.
AOL Plans to take over Time Warner,
but the Federal Communication Commission may force the company to
open up IM before they allow the deal to go through.
AOL dominates all the other players
in the field, including:
- MSN Messenger, 18 million users;
- iCast, 500,000 users;
- Odigo, 1.3 million;
- Yahoo, 8 million;
-
Tribal Voice, 8 million.
Why AOL Drags It Feet
AOL has steadfastly claimed that it intends to open up its instant
messaging to other operators, but has yet to do so in spite of the
threat of government action. Turns out AOL has several good business
reasons not to do so, according to Jupiter Communications:
Advertising. Unlike the rest of
the Web, AOL bases its advertising rates on the amount of time users
spend on the network, instead of on-page views. That means keeping
AIM closed is more valuable even than any increase in traffic generated
by opening it up.
AOLTV.
Although hardly ripe, AOL has got to be looking at the service as
another audience for IM. It's already said it plans to offer the
service along with its interactive offerings.
Wireless.
Wireless instant messaging also has some bumps in the road, but
AOL already has a number of deals under its belt with Nokia, Motorola
and Bell South to extend the reach of AIM.
What's Next?
As instant messaging grows far beyond just chatting, the demands
that AOL allow Instant Messenger to operate with others grow more
shrill. But that's not going to open up IM. Not really. Steve Case
is reading directly from the Microsoft Monopoly playbook. He knows
the longer he can control access to AIM and ICQ, the more money
there is for him and his company.
Unfortunately, what's good for AOL isn't good
for consumers or for innovation. I said it before. I'll say it again.
Sue AOL.
I'm serious about the titan relay. It's got
to be way more exciting than Olympic beach trampoline.
What will it take to get AOL to open up Instant
Messenger? Hit the Talkback button and tell me, or go straight to
my Berst Alerts Forum and swap views.
ZD
Net Anchor Desk September 27,2000
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