I bumped into a youtube demo instructing people how to block instant messenger, I did not watch the entire demo but searched for resource, I found the cisco documentation which documented the process.
Capture IM traffic
class-map type inspect im match-all im-traffic-class match protocol msn-im yahoo-im
Create ACL of the interesting traffic
This is necessary to apply the inspection policy.
access-list inside-hosts extended permit ip 10.0.0.0 255.255.255.0 any
Create a class to capture the interesting traffic
class-map im-inside-hosts-class match access-list inside-hosts
Create IM inspection policy
policy-map type inspect im im-inspection-policy parameters class im-traffic-class drop-connection log
Apply inspection policy onto interesting traffic
policy-map im-policy class im-inside-hosts-class inspect im im-inspection-policy
Apply service policy onto interface to take effect
service-policy im-policy interface inside