Firms cut accord on instant messages

SEATTLE -- Microsoft Corp. and Yahoo Inc. have agreed to make their two instant-messaging programs work together, a partnership that could threaten market leader America Online, people familiar with the situation said.

The deal was expected to be disclosed today, these people said. One of them works closely with Microsoft. The other was briefed on the deal. Both spoke on condition of anonymity because they were not authorized to disclose details.

A Yahoo-Microsoft partnership, allowing users of the competing services to exchange messages seamlessly, would represent close to half of the instant-messaging market. AOL holds just over half.

Instant-messaging services are becoming increasingly vital, not just as social lifelines for young people but in the business world. Google Inc. entered the arena in September with a service that includes voice chat.

''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."

Microsoft, Yahoo, and AOL all declined to comment.

AOL's product, AIM, had some 51.5 million unique US users in September, compared to about 27.3 million for the competing MSN Messenger and 21.9 million for Yahoo's Messenger, according to Nielsen/NetRatings.