Google to Launch IM Service

Instant-Messaging Market Share

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By Yuki Noguchi
Washington Post Staff Writer
Wednesday, August 24, 2005

Instant messaging, a type of communication long dominated by chatty teens, has become the latest front in an escalating war among big Internet companies competing to make themselves indispensable to mainstream audiences.

Google Inc. plans to enter the fray today by launching Google Talk, its own version of a service that allows registered users to send instant messages or talk over the Web to other users.

The new test program will compete with more established services offered by America Online Inc., Microsoft Corp., Yahoo Inc. and Skype Technologies SA.

Instant-messaging software from those companies is available for free, but it is an important moneymaking tool because it increases traffic to those sites, which in turn helps generate more advertising or subscription revenue. Also, as companies offer more news and entertainment on their sites, having a communications tool to deliver and distribute that content is increasingly important.

Google comes relatively late to the game, almost a decade after Dulles-based AOL launched the first version of its Instant Messenger service. AOL remains the country's largest IM network, with 41.6 million users last month, according to Web research firm ComScore Networks Inc. Users typically sign up in groups, creating so-called buddy lists of co-workers, friends and family they communicate with.

In total, there are already 80 million users of other IM services in the United States, and many services are beginning to link to one another.

Skype, which has 51 million users worldwide, plans to announce today it will allow its service to operate with numerous other applications or Web sites. And MSN yesterday launched a new version of its IM service that will link to Vodafone Messenger, which is offered by British mobile phone giant Vodafone Group PLC.

Google says Google Talk's user base could catch up quickly by tapping the multimillion-strong user base of its e-mail product, called Gmail, and by tapping into other IM programs that have open networks. It has an agreement with Internet service provider EarthLink Inc. to work with its Vling voice-and-messaging network, and plans to discuss similar agreements with other major IM providers, said Georges Harik, director of product management at Google.

"We think there's a lot of stuff you can do to improve what's going on now," such as linking e-mail and voice mail to the service, and improving the sound quality of computer-to-computer phone calls, he said. Over time, Google plans to add various features to its service, although he declined to discuss specifics.

Instant messaging, or IM, is a rapidly evolving medium. Its popularity among young users helped spawn a new generational culture and language, such as LOL for "laugh out loud" and BRB for "be right back." Now, IM is increasingly viewed as a quicker version of e-mail, or a partial substitute for traditional phone service. Skype, Yahoo and AOL offer some form of calling that allows users to make or receive calls from their computers to a traditional phone -- a paid service that is increasingly popular among business users.

As technology's reach broadens, all of the companies are scrambling to create new features and tie-ins with existing services to appeal to users. Earlier this month, Yahoo relaunched its service to improve the sound quality of calling between its IM users. In June, Yahoo purchased Dialpad Communications Inc., which eventually will enhance users' ability to make phone calls to traditional phones, a Yahoo spokeswoman said.

In April, AOL started offering a free test service called AIM Triton that includes video instant messaging, new conference-call features and an integrated search engine that links to both e-mail and AOL's IM service. Next year, it plans to include a digital dial pad to make out-of-network calling easier.

"It's a race for supremacy," said Allen Weiner, an analyst with research firm Gartner Inc. Google, like its rivals, is trying to deliver communications tools on top of the popular search and media content it provides. Yahoo, MSN and now AOL all are trying to combine their online media offerings -- such as news, blogs, music and video -- with their e-mail, IM and phone services. "The whole thing between these companies is a media death match," Weiner said.

Google, which was founded in 1998 as a simple word-search tool for the Internet, has steadily expanded its online reach. Earlier this week, it launched new toolbar software that indexes a computer user's habits to deliver customized photos, news, and weather information. Last week, the Mountain View, Calif.-based company said it planned to add $4.2 billion in cash to its reserves through a secondary stock sale, fueling speculation that Google might acquire its way into even more ambitious business plans.


© 2005 The Washington Post Company

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