Yahoo and Microsoft are planning to tear down the walls between their IM applications that currently prevent users from communicating with each other. Full interoperability is scheduled for the second quarter of 2006.
By combining forces, the pair create what they claim is the world's largest IM community of 275 million accounts.
However, according to analyst firm The Radicati Group, AOL has 56 per cent of the IM market worldwide. Microsoft and Yahoo combined have around 40 per cent.
IM applications offer a communications platform, and let users know when a friend or colleague is online.
None of the leading platforms currently offers interoperability, forcing users to maintain accounts for multiple services if they want to stay in touch with all their contacts.
The lack of interoperability has given rise to so-called unified messengers, such as Trillian for the PC and Fire for the Mac. Such applications manage multiple user accounts, preventing the user from having to run a separate application for each messaging network.
The ability to communicate with other IM platforms is one of the most requested features by users, according to Microsoft and Yahoo.
"IM interoperability is the right thing for our customers, our businesses and the industry as a whole, and Microsoft is delighted to help lead these efforts with Yahoo," said Microsoft chief executive Steve Ballmer.
Google recently criticised AOL, MSN and Yahoo for locking out other networks when Google launched a beta of its Google Talk IM application.
"We plan to partner with other willing service providers to enable federation of our services," Google stated in August.
"This means that a user on one service can communicate with users on another service without needing to sign up for, or sign in with, each service."