instant messenger eavesdropping question

Need some help understanding...

Person A and Person B are both on an internal private network (either
directly on the LAN or VPNed into the LAN from an outside network)

A and B are chatting via MSN or Yahoo messenger via IM (not going thru
a chat server etc)

Is it possible for person C who is on the same internal network to see
the contents of the IM traffic between A and B?

Is it any way possible for person D who is NOT on the same internal
network (external / internet user) to see the contents of the IM
traffic between A and B?

-M-

.

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