November 6, 2003 3:04 PM PST

AOL tests streaming-video IM service

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America Online is quietly testing streaming video for its instant-messaging products now that the government has lifted restrictions against launching such a feature.

Later this year the Internet giant plans to release a beta version of its popular AOL Instant Messenger service that will let users chat in real time over streaming video. The official release of AIM 5.5, which includes the video feature, is planned for early 2004.

"We're looking to have the feature in a beta version of AIM before the end of the year," AOL spokesman Derrick Mains said.

In addition, AOL is testing IM streaming video in its proprietary online service, code-named Tahiti. The company said the software will offer a number of new features, such as the ability to dial into the Internet without launching the AOL service. AOL has not set a time frame for launching Tahiti.

AOL's IM tests come months after the Federal Communications Commission lifted restrictions that barred AOL from offering streaming video over IM. The FCC's rules had been imposed as a condition of approving the merger between America Online and Time Warner in 2001. The FCC believed the restrictions would prevent AOL from achieving an unfair advantage by offering high-speed services through its IM services, which at the time enjoyed an overwhelmingly large share of the market.

However, AOL's primary rivals, Microsoft and Yahoo, have seen their own IM products gain market share since the restrictions were imposed. Most of their gains have been attributed to consumer adoption of multiple IM products rather than the limitation placed on AOL's use of video.

Yahoo has supported video chat in its IM client since 2001. Microsoft's MSN Messenger added Webcam capabilities in March.


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