AOL Rivals Have a Message for the Feds

As America Online (AOL Quote) and Time Warner(TWX Quote) shareholders prepare to vote Friday, there is an unlikely cloud on the horizon. Not only is the Justice Department eyeballing concentration in Time Warner and AOL media properties, they are also taking a deep and meaningful look into instant messaging, or IM, as part of the review of the companies' $130 billion merger.

Competitors to AOL's AOL Instant Messenger and ICQ instant messaging services -- such as Yahoo! (YHOO Quote), with its Yahoo! Messenger service, or CMGI (CMGI Quote), through subsidiary Tribal Voice's PowWow -- are hoping that after the shareholders approve the combination, the government will make AOL commit to interoperability as a condition of the proposed deal.

It turns out, there's a lot of money at stake in IM. AOL's rivals are fighting to gain compatibility with AOL's instant-messaging services because unification offers the prospect of vast revenue streams, whether through software licensing, advertising and e-commerce or directory services. These rivals say they'll be locked out of those markets unless the government pushes AOL toward what's called interoperability -- the ability to communicate with people using another company's instant messaging service. ...