NEW YORK (CNNfn) - America Online Inc. may be battling to keep Microsoft Corp. out of its instant messaging service, but the integration of such services may ultimately be inevitable.
Microsoft launched the first volley last Thursday, introducing its MSN Messenger service, a real-time messaging program allowing Web users to communicate through the Internet.
The MSN service is a direct challenge to AOL Instant Messenger, America Online's established service, which has 40 million registered users who send a total of more than 430 million messages daily.
However, Microsoft's service came with a twist; it offered AOL Instant Messenger (AIM) users the opportunity to sign up with MSN while still allowing them to communicate with their AIM counterparts as well.
Additionally, Microsoft's service also tells members when they've received e-mail through Microsoft's free electronic mail service, Hotmail.
America Online launched a countermove of its own Friday, creating roadblocks that didn't allow MSN Messenger users to contact AIM members. Microsoft created a fix for that, only to have AOL create another roadblock. Microsoft is currently on its third such fix.
Microsoft has not yet tried to integrate other instant messaging services, such as Yahoo!'s, into its own service.
AOL said Monday that it continues to be concerned that the secure environment it has built up for its customers is maintained, and that it is not against an open standard for instant messaging.
"We want interoperable systems and that's going to happen," said AOL spokeswoman Ann Brackbill. "The issue is how we will work together. Without the right coordination, privacy will be at risk in our view."
AOL sees the most controversial part of Microsoft's service being the requirement of AIM users to give Microsoft their AIM screen names and passwords. Microsoft requires that information so that its users can access the AIM users.
AOL feels that it is unfair to say that its service is somehow closed as well. "AOL Instant Messenger is available to everyone," said Brackbill.
Assessments of who's being stubborn contradict each other. America Online said it sent a letter to Microsoft about coming up with an open standard which would allow interoperability, but that it hasn't heard back from them.
For its part, Microsoft said AOL is the one who hasn't been receptive to such an agreement.
Deanna Sanford, product manager for Microsoft's instant messaging service, said that at a 1997 meeting of the Internet Engineering Task Force, an organization concerned with Internet architecture issues, Microsoft broached the subject with AOL and 40 other Internet firms.
"When we proposed a standard, they weren't interested," said Sanford. Still, both sides say they are committed to reaching some type of an interoperability method.
Boardrooms and developer rooms
America Online's move to squelch Microsoft's access is somewhat of a new move for the online service. In the past it has taken somewhat controversial measures to block unwanted e-mail advertising, known as "spam," but hasn't tried to block contact between users of other services.
Still, even AOL's best defensive efforts may not be enough, according to Jonathan Penn, an industry analyst studying instant messaging issues at Giga Information Group.
"AOL is going to have to let some of these things through," said Penn.
Far from concerns about privacy, AOL's blocking of MSN Messenger is much more corporate, according to Penn.
"This is really about the boardroom, not the developers' room," said Penn. "AOL is doing this as a market share maneuver and is trying to protect their product. It's really doing a disservice to its customers."
The stakes of instant messaging -- and who emerges as the leader -- could be high.
AOL has quickly established itself as the leader among the services. In addition to its 40 million AIM users, it has another 38 million registered users in its ICQ service, a communications portal that originated instant messaging.
The current incarnation of instant messaging has become the bane of many corporations -- a way for workers to chat about mundane and non-work related topics.
However, analysts say instant messaging will gradually become the basis for many important business applications, such as document sharing, which will allow multiple users to access and edit a document at the same time.
Indeed, software companies have begun looking at its business application already, with Lotus Development Corp. weaving elements of instant messaging into its most recent Domino server application software.
"It's going to grow and it's just going to get bigger," said Penn. "Just like e-mail, interoperability is inevitable with instant messaging."
However, since Microsoft is in a better position to exploit instant messaging's corporate applications, it may be in a stronger position than AOL to exploit its underlying financial value, said Penn.
But while both Microsoft and AOL say they are willing to sit down and talk about these issues, it appears that the two companies' counterattacks will continue.
"Each change AOL has made, we have posted a change as well," said Microsoft's Sanford. "We're committed to providing interoperability."