Microsoft livens up instant messaging

update Microsoft on Monday publicly launched Windows Live Messenger, its next-generation instant-messaging program that automatically updates contact information and lets people share files by simply dragging and dropping them onto a contact list.

Windows Live Messenger, the upgrade to MSN Messenger, is the first core application of Microsoft's new line of Windows Live software and services to be launched publicly, Microsoft spokesman Adam Sohn said.

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Windows Live Messenger was released as a public beta in May with international PC-to-PC calls with full-screen video capability.

The public version adds Windows Live Contacts, which lets users set the system to alert them when any information about their contacts changes, like e-mail address and phone number.

Another new feature is Sharing Folders, which lets people create shared folders in which they can send and store things to be shared with contacts. For example, once a shared folder is set up, a user can simply drag and drop a Word file or photo onto the contact's name and it will go into the shared folder.

Windows Live Messenger also beefs up the voice-over-IP capabilities with a partnership with Verizon that lets consumers do PC-to-telephone calling. In addition, Uniden America, Philips and Motorola are making cordless phones that can hook up to the Windows Live Messenger contact list so users can make PC-to-PC calls using the cordless phone.

The instant messaging service also includes a Rhapsody icon that gives people the option of installing RealNetworks' music subscription service, Sohn said. "That is part of a settlement with RealNetworks," he said. "That piece is really just a distribution partnership."

In October, Microsoft and RealNetworks reached a settlement to an antitrust claim. Under the deal, Microsoft agreed to pay RealNetworks $460 million in cash, $301 million to support its music and game efforts and to promote Rhapsody on its MSN Web business.

The launch includes a promotional tie-in game with the movie "Pirates of the Caribbean," in which users can see backgrounds, images and other features related to the movie.

Windows Live Messenger competes with AOL's AIM, Yahoo Instant Messenger and Google Talk, which also offer various voice-over IP capabilities, including a free phone number from AOL. ComScore Networks ranks MSN Messenger third in number of unique visitors, behind AIM and Yahoo Messenger.

Microsoft's shift to Web-based services and software with Windows Live is an effort to create a larger ad-supported business, which could help it compete with the likes of Google. Many of the Windows Live services are re-branded MSN services, like Windows Live Messenger and Windows Live Mail.

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What happened to Yahoo partnership?

At the beginning of the year Microsoft and Yahoo announced they were going to combine their IM networks, does anyone know if this is no longer happening?