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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Nicholas Thompson who wrote (27070)	7/27/1999 6:10:00 AM
From: puborectalis	Respond to of 41369

Microsoft, AOL Offer Terms for Peace By Rajiv Chandrasekaran Washington Post Staff Writer Tuesday, July 27, 1999; Page A1 Microsoft Corp. and America Online Inc. proposed conflicting peace terms yesterday for ending five days of electronic warfare over "instant messaging," a fast-growing Internet technology used by tens of millions of people. AOL said it is willing to talk with Microsoft, whose software has been bombarding AOL's message system with unwanted transmissions since Thursday. Microsoft's proposed armistice calls for AOL to essentially surrender and stop jamming the messages. Wildly popular among teenagers, instant messages pop up on a recipient's computer screen almost instantly after they are sent and allow real-time typed communication. To date, both parties in a conversation must be using the same type of messaging software to be able zap the messages back and forth. Many people in the industry want a universal standard so people can trade instant messages no matter what software they use. Underlying the fight is a broader struggle over the openness of technologies on the Internet. While some functions, such as electronic mail, work regardless of the software people use, many of the network's popular new features, including real-time audio and instant messaging, have been developed by single firms hoping to get rich as their unique technologies become de facto standards. In the Internet's many niches, companies dream of gaining the same kind of clout that Microsoft has with its Windows products, which are used on most of the world's personal computers. But companies that have lost out in the race for dominance in a particular product – in the case of messaging, that includes Microsoft – often beat the drum for "open" software that no one company controls. To that end, Microsoft last week introduced messaging software that allowed people to not just talk to other users of Microsoft's technology, but to communicate with the 40 million people who use AOL's messaging software. AOL, the undisputed leader in the instant messaging market, accused Microsoft of making an "unauthorized intrusion" into its data network and set out to electronically jam the messages so they wouldn't reach AOL users. The two firms spent the weekend in a bout of digital sparring, with Microsoft releasing new versions of its MSN Messenger software and AOL quickly devising ways to block messages coming from them. The back-and-forth showed no signs of abating yesterday as Microsoft released another version of its software – number five since Thursday – and AOL scrambled to foil it. Microsoft maintains that it is acting in the interests of Internet users who do not want to use AOL's software but want to be able to message people who use it. On its Internet site, Microsoft said yesterday that it is "committed to providing you the interoperability you have asked for." The software behemoth argues that AOL is refusing to open its messaging network to rivals because it wants to protect its market-leading position. AOL executives dispute that contention and said yesterday that they are committed to the same goal as Microsoft: To allow instant messages to flow between anyone who is online. One AOL executive, network security chief Tatiana Gau, sent Microsoft a letter Friday night proposing that the two firms talk about a way to resolve the dispute. "There's no endgame in thrusting and parrying for anybody," said Ken Lerer, a consultant to Dulles-based AOL. "The only endgame here is for the two companies and others in the industry to work together to set up a series of open, common standards." Lerer said AOL "commits to open standards so people can [instant message] just like they use the telephone and e-mail." AOL officials have bristled at Microsoft's tactics. They said the company never consulted them before releasing its software, which they say compromises the privacy and online security of its customers by querying people for their online user names and password. Microsoft worries that AOL, which doesn't want to lose its dominance of a lucrative market, will drag its feet through the process of developing open standards. Although Microsoft wants an eventual industry standard, it believes that AOL should take the interim step of opening its network to competitors. "Immediate interoperability is good for consumers," said Microsoft spokesman Tom Pilla. He said Microsoft approached AOL several months ago to talk about finding a common instant messaging standard but was rebuffed. Yahoo Inc. and Prodigy Communications Corp., two other companies whose instant messages have been blocked by AOL, also have called on AOL to work with the industry on open standards. The Internet Engineering Task Force, a consortium of technology specialists and businesses, is developing a common standard for instant messaging technologies. But industry analysts do not expect the group to settle on a single protocol until next year – a schedule that could benefit AOL. "Standardization isn't in AOL's interest," said Abishek Gami, an analyst with investment bank William Blair & Co. in Chicago. "They don't really want to move forward very quickly with this." Arriving at a common standard could help give rise to a new class of Internet applications such as two-way communication with salespeople at online merchants. "It can have the potential to change the way people use the Internet, to allow for a whole new world of instant communication," said Vijay Saraswat, a researcher at AT&T Corp. who is co-chairman of the IETF instant messaging working group. "But to get there, we need a standard. We need everyone – Microsoft and AOL – to reach an agreement." © 1999 The Washington Post Company Back to the top