You sign on to PLATO and arrive at the AUTHOR MODE page. From there, press SHIFT-U, to see what Users are online at the moment. If you see someone you want to talk to, you press the DATA key (a shortcut on this page for pressing the TERM key, and typing “talk” at the “What term” prompt) and then specifying the name of the person you want to talk to. PLATO then pages the person and two prompts appear at the bottom of the screen. One line is for the person you’re talking to, and one line is for you. The conversation is live, character-by-character, in real time. Make a typo? Press the backspace key? The other person sees it all.
And so it would go, people talking day and night, for years and years.
If this isn’t the basis for Instant Messaging, I don’t know what is. (Source)