Microsoft, Yahoo said in instant message deal

Microsoft Corp. and Yahoo Inc. have agreed to make their two instant-messaging programs work together, a partnership that could threaten market leader America Online, people familiar with the situation said.

The deal was expected to be announced early Wednesday, these people told The Associated Press. One of them works closely with Microsoft. The other was briefed on the deal. Both spoke on condition of anonymity because they were not authorized to disclose details.

A Yahoo-Microsoft partnership, allowing users of the competing services to exchange messages seamlessly, would give the two companies nearly as many users combined as AOL has in total.

AOL's instant-messaging product, AIM, had some 51.5 million unique U.S. users in September, compared to about 27.3 million for the competing MSN Messenger and 21.9 million for Yahoo's Messenger, according to Nielsen/NetRatings.

News source: MSNBC

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