Peace Between AOL and Microsoft? Forget It!

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The five-day "Instant Messaging" war between AOL and Microsoft — in which Microsoft gave its users access to AOL’s IM system with its own, competing format (whose messages were promptly jammed by AOL) — may be nearing a cease-fire after AOL said Monday it was willing to talk. But considering who the combatants are, and what they’re fighting about, somebody’d better send for George Mitchell and Jimmy Carter. "There’s a real, intense loathing, and a deep paranoia, of AOL in Redmond," says TIME technology writer Chris Taylor — evidenced by the fact that in true Bill Gates style, Microsoft’s opening salvo demanded, in effect, complete capitulation on AOL’s part.

IM is just what its name implies — users logged on to the same system can exchange messages as fast as they can type them, making e-mail look like snail mail and making web chatting as easy (and attention-consuming) as talking on the telephone. But unlike telephones, the individual systems are exclusive, and AOL’s IM (and its Internet-based sister, ICQ, also owned by AOL) has the stranglehold on the majority of those chattering (mostly teenage) fingers. Microsoft has a very un-Microsoft solution: a universal standard. "But why would AOL want to agree on a universal standard," asks Taylor, "when they’ve already won with their own?" Since Microsoft is frozen out, as it has been on most of the Web, expect Gates to modify his line a little once talks get going. He should know better than anyone that you don’t get market share by actually sharing the market.