The possible acquisition of Yahoo! by Microsoft is one of the biggest moves to control the Internet. It has lots of implications in the search engine space, but also in the social networking arena. Instant Messaging is certainly the grand father of all social networks: you have to add contacts and have them to accept to share presence, status message, avatar, and some additional personal pieces of information. As such, it could be a domain that will be heavily impacted by a Microsoft/Yahoo! merger.
Let's try some guess work imagining what it could mean in the Instant Messaging space. To keep the reasoning, we will concentrate on the biggest IM services.
I see three possible options for the Microsoft and Yahoo! public Instant Messaging and Presence service:
- Microsoft keeps both networks: I do not think it will happen, as Microsoft has always tried to increase its MSN IM community. The advantage in having one big community is much larger than probably they keep both networks, but interconnect them (already being done in MS / Yahoo! interop programme)
- MSN Instant Messaging user base is merged inside Yahoo! service: I do not think this will happen. MSN community is bigger than Yahoo!. MSN is a very strong leader in several parts of the world. It make more sense to do the other way around.
- Yahoo! IM user base will be merged in MSN. This sounds currently the most likely to happen.
Forces on the public IM battlefield
Merging the two Instant Messaging networks is not enough for MSN to become the biggest Instant Messaging network.
The best figures I found are the following: in 2006, according to Neilsen/Netratings, the market share in the public IM space was as follow:
- AOL: 53 million users
- MSN: 27 million users
- Yahoo: 22 million users
- Google: 866,000 users
The figures are a bit outdated, but the hierarchy is probably still the same.
As said earlier, we can expect that in a distant future MSN and Yahoo services will be at least fully and totally interoperable, if not completly merged.
Recently, it has been found that AOL was experimenting XMPP access to their service. XMPP stands for eXtensible Messaging and Presence Protocol and is becoming very hot. It is the same protocol that Google is using. This protocol is also used by a large federation of IM servers around the world.
It means that the battle lines are shaping up, splitting the public IM world in two or three parts, depending on these hypothesis:
- AOL: 53 million users
- MSN + Yahoo!: 49 million users
- AOL: Google + all federated XMPP networks: estimated 100 millions (pessimistic figure if we trust Wikipedia article, probably more)
AOL needs absolutely to join the XMPP front if they want to keep their leadership in Public Instant Messaging service.
Conclusions
- What it could mean is that AOL is constrained to accelerate the move to XMPP to merge forces with XMPP players. This move seems very good for XMPP: by possibly reducing the number of proprietary protocols in the Instant Messaging world, it possibly strengthen the open standard one.
- It also makes more fragile companies whose business model rely on Instant Messaging aggregation. The less different protocols, the fewer accounts you need, the less you need aggregation tools.
I bet that the future of XMPP and XMPP companies is even brighter today.
Comments
Well, if it has any effects on the XMPP community, it’s certainly not bright.
At first, those statistics are too old even to say they’re outdated. They are like a pseudorandom number. I don’t have newer global(!) numbers unfortunately. For Europe, any statistics revealed only that IM was MSN by definition in 2006-2007.
It’s also hard to calculate gtalk userbase. That’s because it’s the “it is there but I don’t use it I have MSN” for a lot of gmail users.
I don’t think they should merge the two products in the short run; after all, they’re compatible with each other. We’ll see what kind of new API will the WLM 9 have.
As you may know, Yahoo successfully did whiteboarding with their widget technology (called IMvironments), based on HTML and javascript. If MSN would reveal a similiar API, and the two would be merged, jabber must follow.
Nevertheless, although it’s a secondary solution to include messaging in webmail, I can’t wait for a (D)IMP-ejabberd auth module to appear on SAPO sites (3 million users, most of them even do not know at all that they have an IM account!), and to appear on corporate (inner) webmails, a lot of them are based on IMP anyway.
Also it’s a problem to handle existing social networks. In a corporate environment, it would be wise to use everyone-knows everyone (in SOHO environments mostly; grouped by departments/teams), or a team-based (you subscribe to your most close collegaues automatically), but adding everyone is a hassle, and it can be done in MSN too.
Also, we need a portable application technology: we need widgets. We need that a corporate application (supporting a certain workflow) can seamlessly integrate into any client, because it’s code-on-demand, mobile-code, or whatever they call the javascript/ecmascript/actionscript (and java applet if it still counts) world nowadays officially. It would benefit for non-corporate users as well (games and other social activities, collaborative applications, etc - no more “I use Psi, you use Adium, so I cannot send you a file!")
An average corporate application is web-based nowadays. An average social application is web based nowadays. An average single sign-on network is web-based nowadays. Jabber should be also more web-based.
A lot of things has to be done. Authentication plugins with single-sign-on web systems is upon server vendors; just as supporting methods for consuming existing off-line social networks as well.
Portable applications are for client developers and library vendors. They’re a hard question.
It’s nice that you can handle one million users in theory. But it only does anything good, if those millions of users know about the existence of the system, and they have real incentives for using it.
Posted by Adam Nemeth on 01 Feb 2008 at 20:41
I think you miss the fact that federation is XMPP killer feature.
It is not obvious and is meaningful on the medeium term. XMPP is decentralized and it help slowly but surely establishing its position.
When the race to get bigger community gets harder, the XMPP user base (which is estimated to 50 millions users at least) will get more and more attractive for current large public network.
That’s why I predict that AOL needs to adopt to XMPP to react to a possible Yahoo!/Microsoft IM merger. At this point XMPP federation will very likely have reached a critical point.
It will take time, do not get me wrong, but I think it will happen.
Posted by Mickaël Rémond on 01 Feb 2008 at 23:22
Federate with… what?
Once I asked a sociologist friend (special area: internet culture), why people do not care about federating their social networks, IMs, etc, and I came up with the usual example of AOL mail versus Compuserve mail (which was superseeded by SMTP later)
He said: they do not care, because you don’t have to pay a penny to register for both places.
(Btw, have you noticed - if you or someone in your close circle has teenage friends/familiars/etc - that the same happens to Myspace mail versus facebook inbox versus flickr inbox etc?)
And with a hotmail - yahoo mail merger, basically half of the world will have the same e-mail provider; and yet they’ll have no XMPP address binded to such (yes, a JID differs from an e-mail address - for everyone in the xmpp lists and forums, but nowhere else).
Look at these numbers, there was a fresher one but I cannot find it now:
http://www.techcrunch.com/2007/02/08/a-comparison-of-live-hotmail-gmail-and-yahoo-mail/
Having half a billion users? Well, that’s a network.
Maybe gmail would count half as much - by 2010:
http://www.techcrunch.com/2007/12/25/2007-in-numbers-more-people-using-yahoo-mail-this-christmas-than-gmail/
Half a billion users, in a unified network. Plus: anyone can join with their own e-mail address, no matter if it’s gmail or corporate, or school or anything that: they just say, hey, you can reach me at - you know, webpages have www before them, people are identified with that funny @ sign.
Are you sure there is rational, as it is in economy (I mean: management, money, Steve Ballmer), reason to get this network federated with anything?
One of my favourite last line is from the Pink Floyd Album, The Wall, in a song titled “Hey you” (which unfortunately isn’t included in the movie) It goes like this:
Together we stand, divided we fall.
Looks like MSN network has a winning situation in the consumer market with this merger.
Posted by Adam Nemeth on 01 Feb 2008 at 23:48
I still believe XMPP will pan out eventually, if nothing else because corporations would hate having to rely on an external IM service for their needs.
IM is increasingly becoming the main way of communicating within the company sector, though today it’s mostly “Hey, a few of us marketers is going out for sushi, wanna come?” or similar. Not saying it’ll replace email, but for quick questions and the like, and for integrating IM in your business workflow, it’s very handy to have. So, thanks to it’s federation nature, it’ll become de-facto standard within companies within a few years.
However, until XMPP can solve the Jingle bits for good (i.e. draft those darn specs already 
) and a few clients start supporting Jingle proper (Voice and Video at the minimum, maybe file transfer as well), I believe it doesn’t hold a candle to MSN (from a consumer’s point of view). Once those *do* exist though, I believe the XMPP world will take off with great speed. The advantages over MSN, particularly with regards to things like PEP, means the groundwork is already there.
And one place I’m still not sure why it’s not pushed further; MUC as a replacement to IRC. AFAIK I see two things preventing this, the first is the fact there are no distributed MUC chatrooms right now, the second is the lack of a good IRC-style XMPP client. Closest I’ve seen is TKabber, but…
Posted by wertigon on 02 Feb 2008 at 02:18
I guess Microsoft’s intend to acquire Yahoo is a direct strategic response to the news of a few weeks ago that AOL is working on XMPP compatibility. Yahoo and Microsoft already had a federation agreement as you know. With AOL switching to XMPP, it got IMO very likely that Yahoo sooner or later might break that agreement. Thus, the only thing for Microsoft to do is to acquire Yahoo to ensure the Yahoo user base will not join the “XMPP forces”.
The interesting thing now is that I read that Yahoo is not doing good and that there are several other interested parties to acquire Yahoo. Hence it is very likely that Microsoft will pay too much for Yahoo or that another party buys Yahoo. In the latter case, I predict Yahoo will adopt XMPP. As Microsoft will not like this they may prefer to pay way too much to acquire Yahoo. Considering the current stock market crisis this could be disastrous for Microsoft’s shares.
Posted by sander on 03 Feb 2008 at 21:31
Just for record:
http://www.techcrunch.com/2008/02/03/google-cries-wolf-on-microsoft-yahoo-deal-irony-comes-up-blank-in-google-search/
“In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts”
(David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer at Google)
I wouldn’t be sure that the reason of the timing was AOL’s switching to XMPP - it’s rather the fourth quarter earnings, which shows the status of the company (let’s name it easy prey): http://mashable.com/2008/01/29/yahoo-fourth-quarter-earnings/
Posted by Adam Nemeth on 03 Feb 2008 at 22:01
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