The beta release of the new version of Microsoft's MSN Messenger Program does not have the ability to connect users to those using AOL Instant Messenger.
Microsoft had included this feature in its earlier version, but met with staunch resistance from AOL, which argued that the uninvited integration amounted to hacking.
In a statement put out Wednesday, Microsoft said, "we have now reached a point where an interim solution is no longer possible."
Microsoft said that AOL has "chosen a tactic to block consumers from interoperating by exposing a very serious security bug in their client software, putting AIM users at risk. With the release of MSN Messenger Service 2.0, Microsoft has decided it is more important to protect the security of MSN Messenger users while remaining focused on driving towards an industry standard."
Microsoft said earlier this month that it had been considering whether to drop the connection. The instant messaging battles began with the release of the Microsoft product earlier this year.
AOL's AIM claims more than 40 million users and dominates the market. And while the introduction of services from companies such as Microsoft and Yahoo! have stepped up the competition for features, most analysts agree that the user base is the main reason consumers choose a service.
Microsoft and AOL both say they will work with the Internet Engineering Task Force, which is developing a standard for instant messaging. The new MSN software, released as part of a redesign of the MSN portal site, adds features including message formatting, news and headlines, and a "new mail" notification for Hotmail e-mail accounts.