Analysis: Google Unlikely To Change Fragmented IM Market - InformationWeek
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8/24/2005
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Analysis: Google Unlikely To Change Fragmented IM Market

In launching Google Talk, the search company is hoping for interoperability with the major networks built by AOL, MSN, and Yahoo. Experts say it's unlikely.

As the new kid in the instant-messaging market, Google Inc. wants to be friends with everyone, but it's unlikely the seasoned players will let rivals get close to their subscribers.

In launching Google Talk , the Mountain View, Calif., search engine called for interoperability with the major networks built by America Online Inc., Microsoft Corp.'s MSN and Yahoo Inc.

"It's the Holy Grail," Joe Wilcox, analyst for JupiterResearch, said of interoperability.

It's unlikely, however, that the granddaddy of IM, AOL, will open up its base of 41.6 million subscribers to competitors. In comparison, Yahoo, which has the second largest network, has less than half the subscribers of AIM at 19.1 million, according to web metrics firm ComScore Networks. MSN has 14.1 million subscribers.

"AOL isn't letting anybody into their network, if they don't have to," JupiterResearch analyst David Card said. "There's no incentive for AOL to cooperate with anyone."

That incentive, however, could come in time, if IM vendors decide to take the service beyond the ability to have immediate text conversations with friends, family and colleagues. The portals have already added PC-to-PC voice calls and have extended IM to cellular phones. They could go much further in developing a communications platform that tightly integrates email, voicemail and IM, making it all accessible through multiple devices.

The heart of such a communications hub would be the contacts directory, Card said. Besides grouping people by their relationship with the IM subscriber, such as a family member, friend or colleague, the directory also establishes whether they are reachable. That could one day be expanded to add how the person wants to be reached, by PC, cellular phone or some other device.

Microsoft, according to Card, is very much focused on IM as a broader communications platform.

While the evolution of IM could be a potential battleground for the major portals, telecommunication companies and wireless carriers, it's more likely that partnerships will occur, and communication networks will open up, much like email is today, Card said.

"It makes everything more valuable, if the network is bigger," he said.

In the meantime, AOL, Yahoo and MSN are connecting IM to more services, such as online music, in order to build loyalty and help keep subscribers. Locking in customers would also be a strategy behind the building of a unified communications platform.

Google Talk, however, is notable in that Google has not linked its IM client to anything but its web mail service GMail. Therefore, it's difficult to see where Google is heading.

"It's very Spartan," Wilcox said of the new product.

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