Yahoo! team integrated IM and SMS to Yahoo! Mail Classic worldwide. Already a popular feature in the new Yahoo! Mail, Classic Mail users can now instant message or SMS a friend right from the Mail interface.
When you sign into Mail Classic, your IM contact list will appear on the left hand sidebar below your main folder list. Once you click a contact and start a conversation, a window pops up in the lower right corner of your Mail Classic page. The conversation window includes a tabbed interface so you can have multiple conversations at once without cluttering up your Mail page.
Within your contact list window you’ll see two groups: online contacts and mobile contacts. Online contacts are available friends that are in your Mail address book or your existing Yahoo! Messenger list (including Windows Live Messenger contacts). Mobile contacts are friends in your address book for whom you have a mobile phone number. You'll be able to send a free SMS text message to your mobile contacts.
Screenshot of Chat on Classic Mail :