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VeriSign, AOL Teaming on Encrypted IM

America Online will soon offer an instant-messaging product that addresses some of the fears held by companies and organizations that want to use the popular public IM network.

Through a pact between the AOL Time Warner Inc. unit and digital trust-services provider VeriSign Inc. , messages on the AOL Instant Messenger (AIM) network can be encrypted.

The announcement was made Thursday at VeriSign's analyst day. AOL officials were in attendance to introduce the new service, called "Enterprise AIM," according to VeriSign spokesperson Patrick Burns.

The plan calls for VeriSign to distribute security credentials to enterprises that want to authenticate their employees to use encrypted messaging via AIM, he said. A beta test of the new service will begin in 30 days, and will involve from 15 to 20 enterprise customers.

"We hope this helps AOL take IM to the next level," Burns said. "It's part of VeriSign's strategy to provide stable and secure platforms."

Officials from AOL were not immediately available for comment.

The VeriSign/AOL combination won't be the first to offer encoded IM on the AOL network. Already, Cerulean Studios' Trillian offers encrypted IM via the AIM network, as long as both people in the IM conversation are using the client. But Trillian is not authorized to use the AIM network, and AOL in the past has blocked people using the popular client.

Imici and Bantu also offer encrypted IM -- Bantu's system is linked with VeriSign as well.

AOL may be missing the boat, though, when it comes to offering enterprise IM. While businesses, organizations and the government are looking to encrypt IM, most also want to run their own IM networks. Of that group, many want to have links to the public IM networks like AOL's. But AOL still does not offer interoperability, and it has not announced when it will let outside concerns -- those that don't already have business relationships with it, anyway -- into its AIM network.

In addition, some businesses want and are even required by law to keep auditable records of IM conversations. The new Enterprise AIM doesn't appear to support that function.

Also not addressed are security questions, especially with recent news of compromises in the AOL IM network. Enterprises demand secure networks, and AIM is known for its security breeches.

At least one pair of financial analysts seemed disappointed by the VeriSign/AOL announcement. Michael E. Carboy and Brian K. Wakabayashi of Deutsche Bank Securities said the existence of encryption IM technology does not guarantee that the market will accept it. "Both companies explained the technical aspects of the offering but did not articulate the benefits that businesses would realize by adopting these services, nor were pricing details discussed," the pair wrote in a note that covered Thursday's analyst meeting.

A Jupiter Media Metrix study last November said AOL's various services used "at work" -- the AOL Messenger used in conjunction with its proprietary online service, the standalone AOL Instant Messenger (AIM) and ICQ Chat application -- are number one in usage, but a distant third in terms of growth. AOL had 8.8 million unique users in September 2001, up 17% from September 2000. MSN had 4.8 million users, up 88%; Yahoo had 3.4 million users, up 83%.

When the three AOL services are split out, though, it appears that at-work users are focusing more on the company's free-standing services. From September 2000 to September 2001, at-work usage of the AOL proprietary messenger dropped 3%, while use of the AIM increased 35%. The total number of AIM users is more than double those of the AOL online service (6.1 million versus 2.9 million, respectively), Jupiter also found.

Jim Wagner, associate editor of InternetNews.com, contributed to this story. Bob Woods is the managing editor of InstantMessagingPlanet.

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