Microsoft has backed down after a five-month stand-off with America Online (AOL) over instant messaging (IM) communications.

The company said its decision was prompted by a "security threat" to both groups of IM users caused by the dispute.

Since July, the two companies have been embroiled in a tug-of-war over IM services, beginning with Microsoft's creation of MSN Messenger Service - an IM service with the ability to send messages to AOL Instant Messaging (AIM) users. In doing so, the Microsoft technology accessed AIM user passwords, which AOL considered a security breach and subsequently "blocked out" MSN Messenger messages. During the past months, Microsoft has continued to update MSN Messenger in an attempt to circumvent the AOL lockout.

Rather than continue this strategy, Microsoft released a new beta version of MSN Messenger, called MSN Messenger Service 2.0, for MSN users only. According to a document on the company's Web site, Messenger 2.0 will avoid the security threat posed by the way AOL is locking MSN users out of its system. In August, AOL was found to be using a "buffer overrun bug", similar to a "buffer overflow exploit error", in AIM clients to identify MSN Messenger users.

"Due to the severity of the issue and the fact that AOL is exposing its own users to this bug in order to stop AIM users from talking with users of other services, Microsoft is choosing at this point not to provide updates designed to enable interoperability with AIM," Microsoft Director of Marketing Yusuf Mehdi was quoted as saying in the document on Microsoft's Web site.

AOL maintains that its AIM service is not hazardous and the company would not do anything to negatively affect AIM users' security.

"We're glad Microsoft made the decision to respect the privacy and security of AOL instant messaging users," said a spokeswoman for AOL, adding that AOL will continue to block anyone jeopardizing AIM users' security. "The Microsoft-AOL dispute is old news; it really is a sideshow at this point."

The spokeswoman also said that AOL does work with several other companies who are licensing or co-branding the AIM client, so IM cooperation between AOL and other businesses "can be done."

However, with IM continuing to explode into the corporate workplace and household and personal computers, the Microsoft-AOL jousting is far from over.

"Instant messaging is important enough to be fighting over," said Eric Arnum, editor of Messaging Online, in New York. "It's not worth walking away from, but the fighting gets absurd at some point. AOL ... clearly have the installed base on their side. They're saying, 'Beat us or join us, but don't wait for us to interconnect.'"

Microsoft is still urging AOL to open its IM service and create an industry standard; Arnum said the idea to interconnect AIM and MSN Messenger, as well as other IM service such as Lotus Sametime, is before the Internet Engineering Task Force but may take years to resolve.

"There are a lot of analogies to be drawn between what Microsoft did with Windows and Internet Explorer - the Department of Justice case - and what AOL is doing with its install base," said Arnum, explaining that many people choose to use AIM not because it has better features but because that's what everyone else they want to communicate with is using. "AOL has got the market share, and I'm not surprised that they want to fight to keep it. It's a control issue - you want control of that market and control of that advertising space."