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Mobile phones next? Google, moving into IM and Telephony: MSN and Yahoo will respond

Industry gossip now suggests that Google Talk, the newest Instant Messenger, will prod rival Yahoo into going one up later this year or early next year, with a link to the mobile phone business.

Yahoo Messenger already has links to a great many telephony suppliers, mostly broadband suppliers. In the UK, it's a BT partner, with a system for sending SMS text from the desktop browser. But, after discovering that Google planned this week's move into the Skype business, Yahoo started plotting something far bigger.

There are no definite indicators as to where Yahoo will go yet, but the surprise news is that senior technical staff from Vodafone and France Telecom have been in close discussions with YM executives.

Google is known to be building the next step of its VoIP project - an interface from Google Talk to the PSTN. Unlike the Skype project, Google's priority has been to be "open" in its standard, although the Talk product has stopped short of going for Session Initiation Protocol (SIP) so far.

Yahoo has tended to go more for Web compatibility than PSTN links in the past. However, technical observers say that it would make real sense for the company to move into mobile.

That points towards a VNO deal, a virtual network operator arrangement, along the lines of the one Virgin uses over T-Mobile networks in the UK.

The company's links with all the first-tier carriers in Europe are good. France Telecom is unlikely to be interested in the deal, and T-Mobile's problems are all to do with building up its own customer base, which leaves Telefonica and Vodafone as likely partners. Telefonica hasn't got the coverage to interest Yahoo...

Our sources suggest a deal is done, but no announcement is likely till the end of the year.

Comment:

MSN has no plans in place, as yet. It is still thinking "walled garden" and refusing to interface its MSN Messenger to other IMs like AIM from AOL or Skype or YM. But insiders say that if/when Yahoo goes mobile, MSN will have little choice, because Microsoft is already a major player in the mobile phone market.

All Microsoft phones and PDA phones already come with MSN Messenger built in. That gives MSN an advantage over Yahoo! in the mobile market for the moment. But with Yahoo becoming an operator, that advantage will vanish.

That's not a situation Microsoft will tolerate, and MSN can be expected to smell the burning from the cellar pretty smartly after that.