Microsoft will launch a beta test version of Threedegrees, a new instant messaging application, next week, reports CNet. The idea is to let up to 10 kids share a peer-to-peer space, which includes animations and legally-shared music playlists. Newsweek's Steven Levy (author of Insanely Great, about the Mac) thinks it's cool, but then, he got the inside story. The software is also likely to be bad news for America Online, which is not exactly short of reasons to be tearful.