Deal to link instant messaging, finance
By David A. Vise
Washington Post
Millions of investors and their stockbrokers may be able to begin instant electronic communications as a result of a new partnership to be announced today between America Online and Reuters that will link major commercial banks, investment firms and mutual funds through the widely used consumer software.
The partnership marks the first time that AOL has allowed its instant messaging network to communicate directly with other networks, which analysts called a significant step toward interoperability of those services.
AOL and Reuters plan to charge brokerage firms and others a per-person fee for providing secure, encrypted instant messages that can be stored, as regulators require.
"This is our number one request from our customers," said David Gurle, an executive vice president of Reuters, which will handle sales and share proceeds with AOL. "We are planning to release the service in the first quarter of 2004."
While e-mail is an electronic version of regular mail, instant messaging is akin to talking on the telephone, in that parties can exchange text messages as fast as they can type. Teenagers use it to gossip and workers use it to trade business news; in the financial world, it could be used for the sharing of analytical information about investment opportunities, or to confirm the purchase and sale of stocks and bonds.
But unlike cell phones or e-mail software, users of instant messaging networks cannot communicate with people who use instant messaging from a different service. AOL has sought to keep the separation both because of technical issues and the hope for making money from it in the future.
AOL's network, which includes the AOL service, AIM and ICQ, handles more than 1.5 billion instant messages daily and has hundreds of millions of registered users, making it the leading global provider.
But AOL gives away that software for free. Reuters, which provides an array of data to virtually every major bank and investment firm, has the strong relationships with financial firms needed to turn AOL's instant messaging service into an income-generator, analysts said.
"I think it can be very profitable," said Michael Osterman, an industry analyst. "E-mail no longer offers a competitive advantage since everybody has it. If you offer instant messaging and the ability to communicate with customers and partners, that can provide you with a competitive advantage."
The partnership will link the Reuters messaging service, which is available in 120 countries and has about 50,000 active users, with AOL's suite of services. Use of the Reuters service, which is embedded in financial products used by banks and investment firms, has the potential to grow, Osterman said, if its users can trade instant messages with AOL users.
Reuters users will have the ability to appear on America Online's popular BuddyLists, facilitating electronic communication across the two systems by millions of computer users.
