C-Net among others report that Microsoft and Yahoo have reached an agreement to establish interconnectivity between their IM networks, enabling sharing of presence as well as instant message & voice chats between users of both services.
Obviously this is good news for users of both Yahoo & MSN messenger services. It likely also puts pressure on AOL to join their network, finally tearing down the walls between IM services. I suppose the question is where does this leave Skype, though Skype has always positioned itself more as a telephony service with IM than as an IM service with telephony.
Alec Saunders wraps up the reaction in the blogosphere.