IM Chat Interop Just the Beginning for Microsoft Yahoo

Microsoft's recent beta release of technology that lets Windows Live Messenger (WLM) users interact with users of Yahoo Messenger Yahoo's IM application appears to be just the beginning of an effort to link Microsoft's and Yahoo's various consumer oriented communications services. Now the companies are looking into letting their customers connect via VoIP and possibly video conferencing technologies.

If Microsoft and Yahoo do provide a way for users to connect using VoIP the 350 million people who use both services will be able to make PC to PC phone calls for free bypassing emerging dedicated VoIP services, such as Vonage and Skype. Internet based phone calling will likely replace the traditional phone infrastructure at some point analysts believe due to its low cost and the resiliency of the Internet.

Microsoft's and Yahoo's deals aren't exclusive, so either company is free to pursue similar deals with other IM providers as well. Microsoft says that the beta program for Yahoo chat interoperability will end late this year when Microsoft finalizes the technology and integrates it into its IM product.