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:
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