Yahoo Upgrades Messenger’s IM Voice Capability

In a bid to beef up its instant messaging product and provide users with another reason to make it their Web portal of choice, Yahoo has rolled out an upgraded version of its Yahoo Messenger tool that features enhanced PC calling services.

Yahoo launched what it’s calling a “public beta” of its upgraded messaging platform, citing a number of enhancements that are led by free voice calling among personal computers using Voice over Internet Protocol (VoIP) technology.

Other upgrades include spam and virus protection as well as better integration of photo-sharing and contact management tools.

Loyalty Builder

Analysts say controlling instant messaging traffic will be a key to success in the emerging era of full connectivity by Web users, who will likely extend the use of their favorite instant messaging, or IM, product from the PC to their Web-ready mobile devices.

Instant messaging, like e-mail and search, is seen as a key loyalty builder among users, and the portal that supplies users with their IM of choice is more likely to reap additional benefits by providing other services and e-commerce to the same users. Some analysts also see it becoming a broader platform, one that carries a range of services, including e-commerce, to users wherever they might be.

“We are committed to providing a world-class IM experience for consumers, and we will continue to enhance and extend voice services as a core component of Yahoo Messenger,” Brad Garlinghouse, vice president of communications products at the portal, said.

The new version launched simultaneously in the U.S. and 17 other countries, each with its own located version. The new phone calling feature replaces a walkie-talkie style voice chat option with a more telephone-like approach that also includes a voice mail feature.

Another Battlefield

According to data from comScore Media Metrix, AOL is the leader in the free IM sweepstakes to date, with an estimated 22 million active users of its freeware product, as well as another 20 million AOL paid subscribers. Yahoo is second with just under 19 million, and MSN is third with 13.7 million users.

However, the amount of resources being directed to boosting instant messaging use and features underscores its importance.

Just last week, Microsoft’s MSN portal purchased MessageCast, which provides alerts to users via instant message. That move was seen as a way of beefing up the features of Microsoft’s IM entry.

At the same time, the longtime leader in IM usage, AOL, has made it clear that it intends to use its platform as a way to expand its once walled-community of Internet into a World Wide Web portal that everyone can access. The most recent innovation from AOL is AIM Mail, a Web-based e-mail product linked to the AOL Instant Messenger (AIM).

AIM also can be used to make direct phone calls, and an integrated VoIP offering was recently rolled out, as well as a blogging feature that enables users to post to their Weblogs through IM.

Similarly, the Yahoo upgrade includes a number of new features that attempt to draw on other Yahoo products and services, including a community-building feature from the Yahoo 360 networking site, which will alert IM users when a friend has posted a new blog entry or updated a photo page. The upgrade also integrates Yahoo Search into the IM window.

Yahoo did not specifically delineate the system requirements for the beta version, but it indicates on its Web site that the messenger product will work with most recent operating systems and all basic Internet connections. Analysts said complaints about the quality of the old voice chat service should be addressed by the direct telephone-like approach, even for users on dial-up connections.

Instant Gratification

Instant messaging is seen as key for several reasons. First, the medium is one of the most likely to translate smoothly from the desktop to hand-held, mobile devices, where text messaging is already seeing strong traction among younger users. Second, IM is a loyalty-building tool because users are often reluctant to juggle more than one account and more than one set of buddies, or contacts.

Finally, some analysts see IM emerging as a delivery tool for a host of services, going well beyond the current social chatting uses. For instance, news alerts and entire news stories — text or audio or video — could be sent via AIM, as could music downloads and other e-commerce purchases.

Forrester Research analyst Charlene Li said AOL solidified its leadership position in recent weeks, with its AIM Mail feature likely to keep users of AOL Instant Messaging from straying to products offered by MSN, Yahoo or, one day, Google, in order to take advantage of those competitors’ Web-based mail offerings.

Li told the E-Commerce Times that AOL is the “comeback kid” of portals and is using its dominance in the messaging field to set the stage for a strong debut for its portal when it is re-launched later this year.

“AOL is going to continue to roll out improvement and it will challenge MSN, Yahoo and even search partner Google for portal users,” she said. Competitors have recognized both the opportunities to position themselves for the future of IM as well as the threat of having AOL use its strength in the field to become more of a threat in other areas, especially control of online advertising spending, she added.

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