AOL AIMs, Scores With Wireless Phones

Verizon Wireless and America Online penned
a deal Friday to get consumers more involved in next-generation digital
wireless phone services.

While Verizon Wireless touted the gains in its content arena with the pact,
the real news is the benefit AOL gets — getting the biggest digital
wireless phone carrier in the nation to incorporate its AOL Instant
Messenger (AIM).

Verizon Wireless was one of two holdouts among the “Big 5” phone carriers
to sign a deal with AOL and its AIM service, which reaches more than 100
million users around the world.

AIM is scheduled for release on Verizon Wireless phones later this year.

According to Jaymelina Esnele, AOL’s senior communications manager, four
wireless carriers — AT&T Wireless , Sprint PCS , Nextel and VoiceStream — already have AIM
service. So far, only Cingular Wireless remains unsigned.

The instant messaging service is compatible with both wireless phones and
PCs that’s virtually seamless to the consumer, she said, thanks to the
development team at its Seattle office that built up the wireless/PC
compatibility.

AOL, which has been signing up carrier after carrier in order to get AOL
Instant Messenger (AIM) on the phones, now has potentially 30.3 million new
sets of eyeballs when the service is launched.

It’s now a virtual lock for AIM in the wireless market, which recently
announced they would no longer seek to make its service interoperable with
others, and a new arena to provide IM.

Verizon Wireless, as a carrier, can always use another content source to
boost the appeal in next-generation wireless phone services. AOL users
will be more willing to sign onto its wireless phones knowing they can
access their AOL e-mail and address book.

But according to Adam Zawel, a wireless enterprise and commerce analyst at
the Yankee Group, the gain for Verizon Wireless is relatively incremental
— the real deal is in the AIM announcement.

“I have a Verizon Wireless phone right now, and I bet you I can find most
of the AOL content with it already,” he said. “What they are announcing is
a new set of content, but there probably isn’t a lot new (in this deal)
besides instant messaging.”

Despite the relatively small gain, a pact with AOL is something Verizon
Wireless still needs in order to keep pace with other wireless phone
carriers in the U.S. Earlier this week, AT&T Wireless allied
with Microsoft Corp. to sell wireless devices run on
the Windows desktop. The deal will ultimately lead to Windows applications
on Pocket PCs, Smartphones and laptops, fueled by AT&T Wireless spectrum.

As wireless phones edge more towards a commodity item — and as consumers
drop their land-based phone lines in favor of wireless phones — carrier’s
will need to be able to differentiate their services from the competition
in order to thrive, Yankee Group analysts predict.

Since AOL has been signing deals with other wireless phone carriers like
NexTel Communications, Inc. , the reasoning goes,
Verizon Wireless needed to broker a deal with the world’s largest Internet
service provider (ISP) also.

Verizon Wireless charges $6.95 a month for its Mobile Web service, and
already feature the Yahoo! Instant Messenger.

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