Despite much criticism, the brazen strategy appeared to be working--until now. A little-publicised but startling study released last month showed that one of AOL's chief rivals in this market, Microsoft's MSN Messenger, tallied more subscribers worldwide.
Although the study was commissioned by Microsoft, thereby making it vulnerable to immediate challenge, its findings have raised questions about AOL's controversial move to cut off the rest of the IM world. The decision may have backfired by effectively limiting the potential growth of AOL Instant Messenger (AIM) and by forcing the media giant into a protracted war with the powerful software company--just as AOL Time Warner faces other problems, ranging from merger integration to government regulation.
Adding insult to potential injury, the newly combined AOL Time Warner must mind its actions under court-appointed antitrust supervision even though its chief antagonist in instant messaging is a global empire that has become virtually synonymous with high-tech monopoly.
"You see a next-generation parallel to what Microsoft was trying to do in 1997 with the browser," said one AOL employee who requested anonymity. "From our perspective and the perspective of other folks who are looking at this very carefully right now, there is very much a return precisely to the scene of the crime that brought them to the judge's chambers.
"Unfortunately for AOL, the regulatory spotlight is trained on its own actions in instant messaging, not on that of its rivals. Aggravating the situation is Microsoft's unabashed push into the market in recent months, appropriately named "HailStorm," which would put MSN Messenger at the heart of all the software giant's Web products.
