updated 10/12/2005 1:05:43 PM ET 2005-10-12T17:05:43

Microsoft Corp. and Yahoo Inc. will make their instant-messaging programs work together, a partnership that could give the companies more power to compete against market leader America Online.

The Yahoo-Microsoft partnership, allowing users of the two services to exchange messages seamlessly, gives the companies nearly as many users combined as AOL has in total. The companies said in a statement Wednesday that they expect the service to start by June 2006.

(MSNBC is a Microsoft-NBC joint venture.)

Yahoo Chief Executive Terry Semel called it “a turning point for the IM industry,” which has taken years to work out ways for users of rival services to connect to each other.

Analysts said the move could put pressure on Time Warner Inc.’s AOL, the most popular service.

“Up until now, AOL has been able to pick and choose its partners, command the royalties it wants,” said Robert Mahowald, an analyst with research firm IDC. “They’ve moved to develop this market at their own pace. This forces them to take a more aggressive stance.”

AOL’s instant-messaging product, AIM, had 51.5 million unique U.S. users in September, compared to about 27.3 million for MSN Messenger and 21.9 million for Yahoo’s Messenger, according to Nielsen/NetRatings.

Instant-messaging services are popular with business users, teens and others because they let people communicate quickly and easily over the Internet, much like a regular conversation. Some services are also adding other functions, such as video chatting and Internet telephone functions. Google Inc. jumped into the fray in September with a service called Google Talk.

Other instant messaging products, such as Trillian, allow people to send and receive messages from multiple messengers.

But none of the top instant messaging systems have communicated directly with each other until now, though promises of “interoperability” have been made for years. Yahoo and Microsoft said in their joint statement that it’s one of the top things customers ask for.

“IM interoperability is the right thing for our customers, our businesses and the industry as a whole, and Microsoft is delighted to help lead these efforts with Yahoo,” Microsoft Chief Executive Steve Ballmer said in the release.

Redmond, Wash.-based Microsoft has long sought to forge some sort of deal to boost the profile of MSN Messenger. The company also has been in talks with AOL over possible partnerships with Microsoft’s MSN online unit, although it’s not clear where those talks stand now.

“I think what’s really pushing this is Microsoft’s ability to see that it’s long been playing cat and mouse with AIM and ICQ (another AOL instant messaging service),” Mahowald said. “Microsoft needs to stake its presence in a big way.”

Microsoft already has a product that lets business users send and receive messages from Yahoo, AOL and Microsoft’s instant messaging systems, but the product does not extend to general consumers.

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