Microsoft to offer instant messaging service in XP

PALO ALTO: Microsoft Corp. will include an extensive instant messaging

service in its new Windows XP operating system, which will bring together many

of its different messaging and file-sharing services in a single location, the

company said on Tuesday.

The software giant, which plans to unveil the new Windows XP operating system

in October, said the new service, Windows Messenger, will offer a multitude of

communications tools including instant messaging, audio and video conferencing,

application sharing and file transfer.

Although most of these services are not new, they have not previously been

bundled together into a Microsoft operating system. The bundling strategy was

used years ago to help Microsoft's Internet Explorer browser gain traction, and

it eventually helped the company trounce competitors such as Netscape Navigator.

Analysts said that bundling the messaging service in a similar way could help

Microsoft compete with instant messaging services offered by America Online,

which is currently the clear market leader. But they said the impact of bundling

was likely to be far less pronounced than it was with the Internet browser.

"On a scale of significance, I'd say it is reasonably significant,"

said David Card, an analyst with Jupiter Media Metrix. "The reason the

bundling strategy worked in the browser wars was because Microsoft was up

against a competitor that was a puny startup. But AOL is not a puny

startup."

(C) Reuters Limited 2001.