Because being constrained by existing standards, rather than being free to make the changes to the protocol that you think will make the product better, is a huge trade-off. The benefit is that your users get that interoperability with e.g. MSN Messenger or Skype or whatever.

However, if no one else is doing that, if no one else is playing fair (like Microsoft accepting things like typing or presence notifications but not sending them in return), then it turns out you're being constrained, and possibly doing additional work to add features, and the person benefitting the most is someone else's users and not your own.

I really doubt that Google were constrained for technical reasons. XMPP is completely extensible. I've worked with it for over a decade and there's absolutely no technical reason why Google couldn't have extended the XMPP specification and put out their own XEPs (XMPP Extension Protocol) which would have given them all the functionality and features they needed.

XMPP's only major downside at the time was mobile battery life due to XMPPs limitations over cellular. This could easily have been resolved by using a non-XMPP accepted handshake (as WhatsApp did) or by using a completely different protocol for mobile as Facebook did for mobile (MQTT).

Google decided to go for a walled garden approach as a competitive advantage. There's no technical reason for it.

Then I assume their standards and implementations are completely open, and they allow third parties to federate?

Someone has to start doing it, otherwise you'll get the catch 22. So "others aren't doing it" is not an excuse.

But they did start doing it with XMPP and kept it that way for a while.

So. They had to persist, and address deficiencies too. That's the only way to break the cycle.

Because their old one was an open standard, and they were effectively the only one open one (and the last open one standing). So I find it totally reasonable that they stopped caring about it (and probably would again if another major player did).

I find it a very lame excuse. If they care about it, it shouldn't depend on others. In the end, it shows they didn't care enough.

Probably costs a bunch for not that much convenience though. Tragedy of the commons in action.

I disagree. I can understand why you think so, but an analysis of the situation will point out something different.

Google got talk working almost by accident. And it was the most feature-complete chat app for years, at least. And then, they abandoned it for years. This isn't to say it had many features, it had few. But it worked well, was integrated with gmail, was compatible with XMPP and geek's IMs, ...

After that, they killed all the compatibility before making an app that was yet again a lot more feature complete : hangouts. And hangouts got the best features for quite a while.

And then Hangouts started wildly bashing it's weight around. Forcibly taking SMS was one thing. Refusing federation. Forcing Google+ account and lots of extra info. And so on, and so forth. Hangouts was a good app, but created a lot of ill will in the process.

And then it was seemingly abandoned. Feature frozen, with the excuse that all these features had resulted in an extremely difficult to maintain app that they couldn't add features to. Chatting without having a gmail being a big one (whatsapp allowing you to chat with "everyone in your phonebook"), status, reliability (and showing clearly and timely when it isn't/cannot be reliable because disconnected, not 3h after connectivity gets restored), video call quality, adding non-gmail users or just screens to video chats, not allowing bot interaction, apps in the video chat, ...). And this lasted for years.

Inside of China, some chat apps demonstrate how chat apps can be monetized in a way that users appreciate : allow chatting with companies and give those companies the ability to show interfaces for transactions. E.g. buy a coffee. Line at starbucks ? Open up whatsapp, because you're in starbucks it shows starbucks as a contact (you can add it permanently) and there's a button "order coffee". Select what kind of buvaranicpoppafrappadongieccino you want, you pay through the app, and you've just skipped the queue. Next time you do it 5 minutes before arriving. App takes cut of transaction value (just like credit card payment does).

Next, other apps turn up. Whatsapp, Lyne, ... and so forth. And they caught up with Hangouts. Surpassing it in some ways, behind in others. Mostly they're superior in letting you find the people you can chat with. And then they passed it by. And then they left it far, far behind. It's not (yet) the case that they truly dominate hangouts in features, but it's getting close.

And lo and behold : people switched to the (sorry) better apps. I'm not entirely sure why anybody is either surprised or complaining. These changes look a lot like they're making it worse, not better, but we should give them the benefit of the doubt.

That's the case with most of interoperability / standardization efforts. But without it, the whole situation ends up being the current mess.