Commerce/anticompetitive/instant

Study Guide

Instant Messaging

Instant messaging (IM) has quickly turned the internet into a vast communication forum. It was not always this way however, Instant messaging actully started before the internet. Instant messaging first appeared on multi user Operating systems like CTSS and Multics. The users communicated to help with printing quotas and other small tasks. The usefulness of this "Instant Messaging" soon caught on and systems like Freelancin' Roundtable were started. A few years after the come and go of programs like Roundtable, GUI based instant messanger clients were born, starting with ICQ. What started with a small program developed by five Isralis, quickly spread over the internet becomine a must have program for an internet user. Soon after the launch of ICQ, other clients began to take claim in the instant messaging market. Today the most common IM clients are AOL Insant Messanger (AIM), Yahoo Instant Messanger and MSN Instant Messanger (MSN). These clients not only allow for sending text to other users but have evolved and now let users send pictures, files, games, and videos between one another.

AOL

American Online (AOL) was the first to follow ICQ with the release of its free instant messaging software AOL Instant Messagner (AIM) in 1997. AIM allowed users to create a "Screen Name",or alias, to mask thier online identity. AIM users were able to communicate with one another and have "buddies", people who the user communicated with often, stored on a "buddy list". Soon after its launch, AIM became in instant success. According to a June 2006 report, AOL had fifty-three million active instant messenging users. Their closest competitor was MSN with twenty-seven million.

Problems with AOL

Monopoly?

Aim which once held over 90% of the market share for instant messaging was essentially a monopoly. AOL would not allow users of other instant messaging programs to contact AOL users using AIM. The other instant-messaging providers thought that this was unfair and presented the argument that no matter what phone carrier you have you can talk to someone on another service provider. This "monopoly" as the competitors pointed out has forced small IM clients to shut down. AOL retaliated by saying that market studies have shown that Yahoo and MSN have the greatest growth in users. AOL also stated that they would like to work toward interoperability but had other things to figure out first, such as spam and privacy issues. Although these companies' instant messengers' clients still can't contact one another, there have been some breakthroughs.

Trillian

Released September 10, 2002, Trillian is a third-party program that allows the users of multiple instant messaging clients, AIM, ICQ, Windows Live Messenger, Yahoo! Messenger, and IRC, to talk to one another. Trillian is a freeware program just like its AOL, MSN, and Yahoo counterparts. Although Trillian was not the first of its kind, it got the most attention. After gathering a few million users AOL and Yahoo tried to block Trillian users from connecting with their users. To counter this Trillian released multiple patches and even received help from its rival pidgin, a similar instant-messaging program. Trillian also used SecureIM as a way of encrypting its users' messages.

Pidgin

Created in 1999 by an Auburn Unviersity Sophomore, Pidgin(gaim), like Trillian, is a multi-platform instant-messaging client. Pidgin was released as freeware under the Gnu license. As of late 2007, it boasted three million users and was growing. Pidigin users are able to communicate with users of Windows Messenger, OSCAR (AIM/ICQ/.Mac), XMPP (Jabber, Google Talk), Gadu-Gadu, Internet Relay Chat, MySpaceIM, Novell GroupWise, SILC, Yahoo!, Zephyr, Lotus Sametime, QQ, and Bonjour. As with Trillian, many of these clients try to keep Pidgin users from being able to talk to their users. Pidgin also uses a cryptographic protocol, Off-the-Record Messaging , to provide strong encryption for its users' messages. Pidgin also has a few problems. There is no audio or video support, passwords are stored in a file on the administrator's account, and there have been some accounts where is messed with the Windows theme. Although programs like Trillian and Pidgin may not have been the fix that many were waiting for, they are still gaining many users and helping lessen AOL's "monopoly."

Monopoly: a Thing of The Past.

Since AOL has been so popular and contained 90% of the market share, other companies (ie Microsoft and Yahoo!) have been making dealings to combine. These two giants allready combined from an instant messaging standpoint in 2005, their users are at 49 million just a few million short of AOL's service. To counter this, AOL has been doing dealings with Google. Google has invested a 5% stake in AOL. With this stake, Google has integrated its Google Talk to be able to work with AOL's AIM service. This puts AOL at about 53.8 million users, just a few over that of Microsoft and Yahoo!. This closeness in users shows that obviously AOL's "monopoly" is a thing of the past.

Microsoft

Mirosoft has had two runs in the world of instant messaging, Windows Messenger and Windows Live Messanger. The first, Windows Messenger was released with Windows XP. Windows Messenger was pre-installed in XP and set up as the user's default messaging client. This caused many users to be upset and think that Microsoft was only trying to cut off its competitors.

Is Microsoft trying to cut off its competition and increasing the market share of Windows?

Although it may come across as if windows is trying to cut off its competition at the knees, in newer versions of Windows (e.g., Vista), Windows has ditched the built-in instant messenger. In fact, Windows ditched Windows Messenger altogether. Not only was it not pre-installed on the machines, but it was no longer their front-running instant-messaging product. Windows now had come out with Windows Live and with it, Windows Live Messenger. This new messenger no longer came pre-installed on the machine nor did it make itself the default messaging client. All and all it seems as if Microsoft heard out its users and took a step back.

As for the scare of Microsoft's HailStorm, a project to make MSN-hosted user data available to the same users at non-Microsoft web sites, it was never released.

Final Note and Ethics

As for interoperability, users can only hope for now. Although there have been talks between the "big three" about some kind of combined instant messenger, the three cannot agree on how to do it.

As for the scare about AOL's "monopoly" and Microsoft's cutting off its competition, the people no longer have to worry as Microsoft/Yahoo! have emerged closer in the instant messaging competiiton, and Microsoft has backed down.

Although the ethics of a monoploy are simple, AOL was believed to be unfairly stomping out the competition. This sqashing of smaller companies lost many dollars for small buisness owners while large companies such as AOL, Microsoft and Yahoo! were gaining an unfair advantage by being the only alternative users could turn to.

Microsoft also was unthecial in his providing instant message clients with its operating system. Although it does own the operating system and the Instant messaging client, the fact that it makes the Windows Messenger the default messaging client makes a decesions for the user to cut off other IM clients.