Update: Microsoft, Orange to link IM networks

Tie-up makes it possible for 375 million people to instant message each other using PCs or mobile phones

Microsoft and Orange will link their instant messaging systems later this year, allowing up to 375 million people to chat with each other using their PC or mobile phone, the companies said Wednesday. In reality, take-up will be much more limited.

Orange will offer its French mobile phone and Internet access customers a new service in December called Orange Messenger by Windows Live. It will extend the service to the U.K. and Spain next year, making it accessible to 135 million Orange customers in total, the company said Wednesday. Microsoft puts the number of Windows Live Messenger customers at 240 million.

Behind those numbers, though, the immediate potential of the link-up is more modest. Just 700,000 of Orange's customers will have handsets compatible with the service when it launches in December, said Didier Lombard, chief executive officer of Orange's parent company, France Télécom. It will be several years before all customers have replaced their handsets with compatible models.

Worse, before Orange's Internet access customers can contact Windows Live Messenger subscribers from their PCs, they will have to download a new version of Orange Messenger, incompatible with the existing one. Once a user has moved to the new Orange Messenger, they will be unable to contact friends still using the old system. Orange is still considering what migration options to offer users, a company spokeswoman said.

Steve Ballmer, Microsoft's chief executive officer, was also in Paris Wednesday to make the formal announcement with Orange executives.

Microsoft's customers have been pushing the company to link PC and mobile phone messaging systems for a number of years, Ballmer said. "But for a variety of reasons, some technical, some commercial, these two worlds remained apart," he added.

The company has chosen to work with Orange because "Many of the leading-edge things in mobile communications are not happening in our home market, they are happening in Europe, they are happening in France," Ballmer said.

Although the collaboration with Orange is not exclusive, Microsoft has no immediate plans to develop similar services with other mobile phone operators or Internet service providers (ISPs), Ballmer said.

Ballmer added that other mobile phone operators had incorporated clients for MSN Messenger, the forerunner of Windows Live Messenger, into their phones, but they could be expensive to use as message traffic was priced as mobile data. Orange's pricing plans are more interesting, he said, because "I'm a parent. I just like the idea that it's not going to hurt the budget of the parent."

France Télécom's Lombard refused to say exactly how Orange will charge for the new service, saying only that it has developed an innovative model.

Orange already offers an IM service called Orange Messenger. The link between the two companies' services will allow Orange customers to exchange IMs with customers of other networks that use Windows Live Messenger. In France they include mobile virtual network operator Ten, and GSM (global system for mobile communications) operator Bouygues Telecom.

The link-up will also allow Orange and Windows Live users to video-conference from their PCs, and send SMS (short message service) text messages from their PC to mobile phone users.

Microsoft and Yahoo announced in July that they had linked their instant messaging networks. However, Orange Messenger account holders will not be able to communicate with Yahoo users via the Windows Live Messenger platform when the new Orange service launches in December. That functionality, and other features including video calls from PCs to mobile phones, will not appear until 2007, an Orange spokeswoman said.

France Télécom recently rebranded its Internet service operations as Orange, which is also the name of its mobile business. The Internet access service was previously known as Wanadoo.