AOL to embed IM services in mobile phones

America Online has reached a deal with AT&T Wireless Services to embed its AOL Instant Messenger (AIM) and ICQ chat software on...

America Online has reached a deal with AT&T Wireless Services to embed its AOL Instant Messenger (AIM) and ICQ chat software on some AT&T mobile phones, to simplify instant messaging (IM) services for users.

The embedded IM feature is already available on the Nokia 3100 and 3200 handsets and AT&T will make it available on more phones throughout the year.

The IM services appear as a feature on the phones' software, so that users will be able to locate and use the services quickly.

AT&T will charge 10 cents per message sent and incoming messages are free.

AOL's instant messaging services were already available to AT&T's customers via SMS text messaging and through AT&T's mMode service.

The IM-to-text service allows users to send an IM from their desktop to an AT&T Wireless user by addressing the text to a phone number. The AT&T Wireless users could then respond. This service is only available to users with two-way text messaging capable phones.

"The IM over SMS service doesn't work very well because it jams two forms of communication together ... it's not very natural," said Joe Laslo, senior analyst at Jupiter Media.

Laslo believed AT&T could do well with the embedded service, enabling it to increase per-user revenue if it gets the pricing structure right. Users would be more comfortable with flat-rate plans rather than per-message pricing, he said.

He added that the deal puts AOL in a good position to spread its service to mobile users. AT&T Wireless had nearly 22 million subscribers in the US at the end of last year.

IM over mobile phones is still a developing market in the US. According to a study conducted by Jupiter in December, only 5% of users surveyed had sent IMs over their mobile phones, while 36% had used text messaging. Eight per cent of those surveyed had checked their e-mail over their mobile phones.

Scarlett Pruitt writes for IDG News Service

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