Can Yahoo! Messenger 9 Topple AIM?

Yahoo on Tuesday rolled out a beta version of Yahoo! Messenger 9.0, cleaning up the client's user interface and making it easier to call contacts and send text messages. But more interesting is news that Yahoo! Messenger saw its user base grow 19% over the past year, which pulls it closer to overtaking AOL in the US.

AOL, which owns both AIM and ICQ, has dominated instant messaging for a decade, but both Yahoo and Microsoft have chipped away at AOL's lead, taking advantage of the company's dial-up business collapse that left AIM largely stagnant. MSN -- now Windows Live Messenger -- counts the most users worldwide, but AIM still reigns supreme in the United States.

However, in the past year AOL only saw a 2% growth in IM, bringing its user base to 30.2 million, according to comScore. Yahoo's reach in the United States topped 27.7 million users in September. Worldwide, Yahoo saw 30% growth to 94.3 million users, which can be attributed to new languages of its software.

The release of Yahoo! Messenger 9 could put the company on top in the United States if the new interface is well received. Yahoo has added new emoticons and skinnable backgrounds, while at the same time reducing the "bloat" found in previous versions. Hovering over a contact now offers three options: IM, Call and SMS.

Yahoo Messenger 9.0Beneath the surface are a number of attractive changes as well. Media sharing capabilities have been expanded, and Yahoo has raised the file transfer limit to 2GB per file. Objects can now also be embedded directly in the message window, include videos, photo slideshows from Flickr and even online maps. The company has dubbed this a "media player" directly in the chat window.

Like in recent offerings from AOL and Microsoft, calling features play a bigger role in Yahoo! Messenger 9. Users can forward incoming calls made via Messenger to a standard phone number, forward incoming IM's to a mobile device and send text messages to contacts. But consumer adoption of such features has been slow; more users care about new emoticons.

With Yahoo phasing out its 360 social network, it's likely that Messenger will play a central role in linking up the company's various Web services. Microsoft relies heavily on Windows Live Messenger for the same purpose, pointing users to Spaces, search and more. This is pushing Yahoo to release more frequent updates to its client, and expand its market reach. Version 9.0 comes in six additional languages, numbering 25 in total.

Still, AOL isn't backing away from the fight and has renewed its focus on AIM after a couple years of testing the waters with its Triton client. AIM version 6.5 -- released earlier this month -- introduced a modern user interface, tabbed message windows, text messaging and buddy status messages. While it has failed to expand much internationally, AOL has been able to retain the lead at home, which gives it a leg up against competitors - even if AIM's a little late to the party.

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