People on MSN could chat with people on GChat, but people on GChat couldn't chat with people on MSN.
Since a critical feature of a messaging app is "my friends are on it", that gave MSN/FB/AIM a huge advantage over GChat, and had they not turned off XMPP integration, they would have bled off users until it was only used by small pockets of people, all of whom were on GChat (eg. Googlers).
Since a critical feature of a messaging app is "my friends are on it", that gave MSN/FB/AIM a huge advantage over GChat, and had they not turned off XMPP integration, they would have bled off users until it was only used by small pockets of people, all of whom were on GChat (eg. Googlers).