RealTime IT News

AOL One-Ups Messaging Competitors

America Online Inc. Tuesday announced a three-year agreement with Internet telephony service provider Net2Phone Inc.

As a result of the deal, America Online (AOL) plans to provide their 37 million AOL Instant Messenger (AIM) users with Internet telephony communications services.

AOL will work with Net2Phone (NTOP) to create AIM-branded Internet telephony products and services. The service includes an AIM-branded card that offers users low-cost Internet telephony access.

The AIM telephony system will let users place and receive telephone calls from a personal computer to a facsimile machine or telephone and from a phone to a PC or facsimile machine. The cross-platform telephony service also includes conference-calling features.

Barry Schuler, AOL president of interactive services, said the Net2Phone deal would transform the way millions of AIM members communicate.

"With this agreement, we are significantly building the tremendous value of our popular AOL Instant Messenger product that is revolutionizing online communications," Schuler said. "Combining instant messaging with spoken conversation will bring even more convenience to our AOL Instant Messenger users."

According to Media Metrix Inc., AIM is the number one ranked chat application with a more than 27 ercent share of the marketplace. Currently, the AOL's Buddy List Network and AIM users includes more than 75 million members who send approximately 720 million messages a day.

Schuler said the new services promise to make the AOL's AIM service even more central to people's everyday wired and wireless lives.

"Once we extend the AOL Instant Messenger service to mobile devices beyond the PC, as part of our 'AOL Anywhere' strategy, these new communications services will provide even more convenience and value."

Earlier this week, CMGI Inc. (CMGI) acquired Tribal Voice Inc., a rival IM service provider. The company intends to challenge AOL's instant messaging market dominance. According to industry analysts, the Net2Phone agreement is essential to AOL's ability to maintain their leadership of the IM marketplace.

Net2Phone also has an existing four-year agreement to provide Internet telephony services for America Online's ICQ service, which has more than 50 million register users, and a two-year agreement to provide Internet telephony calling card services for the AOL-owned CompuServe service.