Then as smart phones took off, all the companies quadrupled down on the walled garden idea
Yahoo and MSN had interop before smartphones existed. AIM and Google Talk (Jabber) as well.
When smart phones took off, Facebook Messenger actually had Jabber support (which also gave it interop with AIM and Google Talk).
The consolidation and walled gardens unfortunately came back later.
See also: John Oliver’s take from 6 years ago