With a flurry of electronic strikes and blockades, Microsoft Corp. and America Online Inc. went to war yesterday over an increasingly hot method of communicating over the Internet called instant messaging.
Until yesterday, AOL's messaging system, with its "Buddy List" and distinctive chime that was popularized in the movie "You've Got Mail," was the only technology most people associated with instantaneous Internet communications.
But on Thursday, software behemoth Microsoft jumped into the market with a product it said was far more sophisticated: Not only would it allow people to message other users of Microsoft's software, but it would let them communicate with the 25 million people who currently use AOL's messaging software.
Worried that Microsoft's product might spirit away its users, AOL responded early yesterday morning with a direct counterattack. The Dulles-based online service began electronically jamming instant messages that users of the Microsoft software tried to send to people who use AOL's Instant Messenger service.
AOL said Microsoft's software was making an "unauthorized intrusion" into AOL's network.
Late yesterday, Microsoft returned the fire, releasing a new version of its MSN Messenger software that it said would foil AOL's blocking attempts and again allow communication with AOL users. A Microsoft executive boasted that its new software "gets around" AOL's defenses.
But in a matter of hours, AOL said it had, for a second time, thwarted Microsoft. In both cases, AOL prevented Microsoft users from seeing whether their AOL "buddies" were online and from sending messages to them. "We know how to block things," AOL spokeswoman Ann Brackbill said. "We do this all the time with [unsolicited] spam and scam e-mails."
AOL yesterday also prevented users of instant messaging software developed by two other rivals, Yahoo Inc. and Prodigy Communications Corp, from communicating with users of AOL's messaging service.
The battle between industry titans Microsoft and AOL reflects the increasingly high stakes in the business of instant messaging, which allows Internet users to zap short notes to their friends and co-workers.
Both firms' software place a playing-card-sized box on a user's computer screen that alerts the user when a "buddy" has connected to the Internet. The boxes also display ads. "It's this little billboard on everyone's PC -- and that's an amazingly lucrative business in terms of ad revenue," said Rob Enderle, an analyst with Giga Information Group, a market research firm.
With its 25 million users, AOL has a commanding lead in the instant messaging world, which is rabidly popular with teenagers. AOL built its dominance by first offering instant messaging on its proprietary online service, where it became one of the best-used applications. Then, last year, the company began offering the technology for free to any Internet user. Millions of copies were snapped up within months. AOL also has 38 million people registered to use another instant messaging service it owns, called ICQ.
Although many in the computer industry have urged AOL to make its Instant Messenger technology an "open standard" -- publishing technical details that would allow other firms to write messaging software that would interface with the AOL network -- the company thus far has refused to do so.
Analysts say its motives are largely economic: AOL is the biggest player and wants to control the messaging market, in the way that Microsoft largely controls the operating system market with its Windows products.
Enter Microsoft. Sensing the potential rewards in instant messaging, the software giant did not want to cede a key part of the Internet communications market to AOL. But simply releasing its own rival messaging software would not have made a big splash, analysts said. Messaging software is only valuable if you can reach many other people.
As a result, Microsoft designed the product so its users could message both Microsoft and AOL customers, provided the Microsoft user also had an AOL messaging account.
Microsoft accomplished the dual compatibility by having its software engineers carefully study AOL product. Microsoft says it did this because of demand from the Internet community, which, the company argues, is clamoring for open standards.
Consumers "want the ability to communicate with everybody on the Net," said Yusuf Mehdi, the director of marketing for Microsoft's MSN group. Mehdi said that more than 200,000 copies of Microsoft's messaging software have been downloaded from the company's Internet site.
AOL spokeswoman Brackbill said Microsoft's product gains "unauthorized access to our network . . . and our infrastructure."
She also criticized Microsoft because when installing the software on their machines, people are asked for their AOL messaging "user name" and password. (This helps the software connect to the AOL system.) "Asking people to give out their password in that way is just antithetical to everything we tell our members," Brackbill said.
Mehdi said Microsoft likely would further revise its software to bypass whatever obstacles AOL puts up. "As long as our customers are demanding interoperability, we're going to do our best to provide that," he said.
Prodigy, the nation's sixth-largest Internet service provider, said yesterday that it had been notified by AOL that users of Prodigy's instant messaging service no longer would be able to access AOL's service. Prodigy said it had developed its service based on technology released by AOL and with the understanding that AOL supported having other messaging systems communicate with AOL.
"Those of us engaged in building the Internet are dedicated -- and depend on -- collaborative development towards open standards," Prodigy Chief Technology Officer Bill Kirkner said. "AOL has chosen to use its power as the owner of both [AOL Instant Messenger] and ICQ to effectively privatize on the most popular uses of the Internet today."
According to Kirkner, AOL said Prodigy would have to pay to license AOL's software if it wanted its subscribers to again be able to use instant messaging with AOL users. He called AOL's stance "a clear violation of the spirit underlying the development of the Internet."
Brackbill said the technology Prodigy used was not intended to develop messaging software. She defended AOL's decision to charge Prodigy for AOL's technology, saying "it's software we developed."
Industry analyst Enderle predicted that ultimately AOL will decide to embrace a system of open standards in which everyone's messaging software can connect. Under such a scenario, AOL would hope to remain the dominant player by virtue of the lengthy lead it enjoys today.
"They don't want to risk getting outflanked by Microsoft," he said. "This is too big of a market to lose."