AOL, Yahoo! Push Forward on Business IM

Yahoo! ( YHOO) and America Online are edging forward on the road to instant messaging riches.

The companies announced separate agreements Wednesday designed to further the usage of instant messaging in the corporate world -- an audience that, unlike the hordes of recreational IM users, is accustomed to paying for software.

The moves fit in with the companies' strategy of boosting revenue from IM, which has proven hugely popular with Internet users but hasn't generated money on par with its ubiquity.

Shares in Yahoo! rose $1.06 Wednesday to trade at $28.96, while the stock of AOL parent AOL Time Warner ( AOL) rose 38 cents to $15.40. Riding investors' revived enthusiasm for pricey Internet stocks, Yahoo! shares have performed strongly over the last year, while AOL continues to try to fight its way back from a long series of reversals.

Yahoo! says its next release of Yahoo! Messenger Enterprise Edition will enable employees to easily launch WebEx Communications' ( WEBX) videoconferencing services from within the instant messaging program. BEA Systems ( BEAS) says it is integrating Yahoo! instant messaging features into its WebLogic Workshop product for developing applications.

Meanwhile, AOL said it had reached an agreement with privately held IMlogic, which sells software used by corporations to manage their employees' use of AOL Instant Messenger and other IM systems. IMlogic is the first third-party vendor to receive the blessing of AOL's new AIM Certified Partner Program.

The market for instant messaging software supplied by third parties amounts to $100 million to $200 million annually, estimates David Ferris, president of Ferris Research, a research firm that focuses on messaging. "It's early days," he says.

Despite all the bubbles that have been burst on the Internet, the lure that instant messaging's popularity can be transformed into profitability is growing. Earlier this month, for example, SoundView Technology analyst Jordan Rohan hypothesized that AOL could generate $350 million in additional annual revenue by offering a $2-per-month version of AOL Instant Messenger. Alas, no such plans are known to be in the works as yet.

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