Flash storage manufacturers SanDisk and M-Systems are slated to announce Friday at CES a new USB standard called U3, which enables users to carry, store and launch applications directly from a USB flash drive without installation. ICQ will be one of the first adopters of the platform, and the instant messaging software will come enbedded on devices from participating vendors.

America Online's ICQ U3 edition software will offer core messaging functionality and presence awareness, as well as additional communications tools and customization options - instantly accessible by simply connecting a USB drive.

Microsoft, however, is conspicuously missing from U3 alliance's list of endorsing companies. Citing security concerns, Microsoft plans to add an administrative interface to Longhorn that sets policy for USB devices. Windows XP Service Pack 2 already has such functionality, but without an interface. The company has not yet said whether it intends to support U3 compatible devices.

Jupiter Research senior analyst Joe Wilcox addressed the related security questions, saying, "Companies already have reason to worry about lost or stolen laptop computers. Would any reasonable IT manager risk sensitive applications or data on a tiny USB dongle that could be easily lost? Then there is computer security. Sure, U3 may promise no permanent, local installation, but spyware creates perceived risk when working with software from unknown or untrusted sources."

In the 2003 Touchtone Entertainment film "The Recruit," a rogue agent of the Central Intelligence Agency managed to bypass the US Military's National Security Systems (CNSS) standards and covertly glean sensitive data from the agency's computers by using a simple USB storage device that was concealed in a coffee mug.

Although "The Recruit" was just a movie, it serves as an example of the types of threats organizations may face from devices ranging from USB hard drives and key-chain drives, to portable music players, media smart cards and digital cameras.

Despite the risk that portable USB storage devices could pose, Jupiter's Wilcox projects that there will be specific usage scenarios for U3 devices. "Some limited scenarios that make sense: Distribution of educational material, where the application runs from the USB device rather than forcing installation of a program to be used only a few times; try-and-buy software, where shareware applications ship on promotional or store-bought USB keychain drives; or secure-PC software residing on a USB dongle required to access a computer."

Aside from potential security concerns, consumer interest in U3 devices is also unclear. Iomega, once famous for its ubiquitous Zip drives, previously created a similar platform called Active Disk to reinvigorate its ailing product lines. However, the technology failed to catch on as disks were too expensive for users to dedicate to a single application.

But an AOL spokesperson said U3 devices will be useful for consumers, suggesting that an ICQ-laden USB drive could be helpful while traveling to hotels that have a limited set of applications installed on public computers. ICQ already offers a Web-based client, however, as does AOL Instant Messenger, which does not currently support the U3 standard.

The U3 edition of ICQ will be available to users in one of two ways, according to the company: Users can buy the software pre-loaded or, in absense of a pre-loaded key, they can download it.