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Last year Microsoft and Yahoo! buried the hatchet and agreed to allow their IM networks to interoperate, a key step to building a flat global IM network.

Vodafone says the new IM service will be launched in select European markets later this year and will let customers use their address book and see when their contacts are online seamlessly on a PC or a mobile.

Orange launched its own Orange Messenger in December and it will roll it out in other countries in Europe now.

IM on a mobile phone is also seen as a generalised IP route into the handset, and as on a PC it can also be used for IP voice, photos and even potentially video. Initially, the cellular operators felt it was important to avoid a software platform from outside the cellular community coming to dominate this, but now it looks like the effort of hosting such a network looks daunting and Vodafone would rather let Microsoft have the headache.

Microsoft confirmed to us that a variety of business models were being considered by Vodafone, including offering IM as a subscription service and the use of advertising to mitigate costs.

But the Microsoft headlines at the show were in fact captured not by its quiet winning over of cellular IM in Europe, but its launch of Windows Mobile version 6.0 and the fact that Vodafone, T-Mobile and Carphone Warehouse have all taken hosted push email services from Microsoft and AT&T's Cingular Wireless is taking its Live Meeting teleconferencing software.

While Faultline has been of the view that Microsoft should be targeting services above the operating system level, Microsoft Communications Sector general manager Michael O'Hara agreed but said: "Yes, but that doesn't mean that we shouldn't also develop our own operating system platform," and told us that it has a new user interface, most of the Office suite tools and a focus on getting things done in "one click".

It also has stronger protection of personal information, including the ability to remotely wipe all data from a device when lost or stolen, and it offers improved handset search.

Windows Mobile 6 allows HTML formatted email, with live links to the web, and is available from a corporate e-mail server like Exchange Server 2007, or from Windows Live Hotmail.

Microsoft said Cingular, Orange, SoftBank and T-Mobile Dash will be updating to Windows Mobile 6 in the coming months, as will manufacturers LG Electronics, Motorola, Palm, Samsung, and Toshiba.

We can't think of anything worse than having Microsoft Office on our phone, but it seems to be a strong sales feature in that enterprises don't have a training burden when introducing it so Microsot makes the point that the new mobile versions of Outlook, Word, Excel and PowerPoint all work the same on a PC or a handset.

But many of the important developments for Microsoft at the show were almost invisible. Its ability to allow services to interact behind the scenes is what has been driving Microsoft's success in the telecoms sector and behind that is the Connected Services Framework (CSF) that sits above the network level, living on servers in the network, doing just what the moniker says, connecting services together. We liken this to the applications layer of IMS, with genuine applications giving calls to CSF, which shares services between them and in turn gives calls to the .NET Framework and then down into the network layers, perhaps using IMS. It is CSF that is behind all of the interaction between email, IM, hosted VoIP, Live Meeting and every other service that extends out of a piece of Microsoft software.

This year the CSF team is taking the concept out towards device virtualisation and offering to retain for operators the internal details of the capability of each device. It can then split a service deliverable from the platform element, which simplifies the core application but then subsequently changes an image or a message to a format that will fit the specified device.

Now CSF can manage the binding of services to a virtual device instead of leaving this to the operator and ensure that the right formats across multiple service types find their way to each handset.

Copyright © 2007, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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