• Jeff Matthews

The Amway Salesman in the Driveway

Microsoft, Yahoo Plan Instant-Message Pact

Quite the dramatic headline in today’s Wall Street Journal. You’d think Microsoft and Yahoo had discovered oil and gas on the Internet. Internet users have long complained that they can’t get their instant-messaging services to talk to one other. That is about to change. Isn’t this exciting? In a competitive realignment of the heated Internet industry, Microsoft Corp. and Yahoo Inc. are expected to announce today that consumers using their free communications services — including instant messaging and computer-to-computer voice calling — will be able to communicate directly with each other for the first time, say people familiar with the matter. Now if indeed anybody actually used Microsoft and Yahoo’s Instant Message service, this might be big news.

The expected alliance represents a breakthrough in the fractured market for instant messaging…. In the past, consumers using Yahoo’s Messenger instant messaging could communicate only with other Yahoo users and not with those using instant-messaging software from Microsoft or others; the same restrictions applied to those who used Microsoft’s MSN Messenger instant-messaging software. The fact is, however, I know exactly one person who uses “Microsoft’s MSN Messenger instant-messenger software,” as the WSJ calls it. Just one—compared with the 56 individuals who are, at this moment, working online according to my AOL Buddy List, not to mention the other 64 who are offline at the moment.

But you wouldn’t know that almost nobody actually uses Microsoft or Yahoo’s IM from today’s WSJ story:

The expected linkup of Microsoft’s and Yahoo’s communications services would immediately challenge the leading instant-messaging market share of Time Warner Inc.’s America Online unit. AOL has a 56% market share world-wide, according to research firm Radicati Group Inc. It has long resisted letting users of other instant-messaging services connect with its own. A combined Yahoo and Microsoft could command 44% of the global instant-messaging market… That is, as they say, corrupt data, as my daughters and their six million IM-dependant friends could have told the Journal reporter.

For example, I actually do have Microsoft Messenger on my home computer.

But I never asked for it. Rather, Microsoft Messenger insinuates itself on anybody who uses Microsoft’s email product. Every time my computer boots up, Microsoft Messenger is there, lurking, like an Amway salesman in the driveway.

And I ignore it, like I ignore that Amway salesman, hoping it will go away.

The trouble is I actually know one person who uses Microsoft Messenger, and therefore I keep it there, just in case he pings me, which happens once a week or so.

Meanwhile, at this very moment, my IM icon is flashing with the messages of a half-dozen individuals who, like myself, find instant messaging to be far superior to working the phones.

So Microsoft and Yahoo can combine their two instant-message services, and on paper it might show they command a 44% market share “of the global instant-messaging market” on paper.

But in the real world, this alliance looks to me like another one of those high-tech alliances we read about from time-to-time—like Sun Microsystem’s “alliance” with Microsoft, or Google, or whatever successful company Sun is trying to attach itself to these days.

Which is to say, nothing important.

Why, I haven’t even gotten an instant message about it this morning.

Jeff Matthews I Am Not Making This Up

© 2005 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

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The content contained in this blog represents only the opinions of Mr. Matthews. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. The content herein is intended solely for the entertainment of the reader, and the author.

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