One of the most interesting parts of the technology space is actually the hosted e-mail market, where Yahoo!, has recently done something amazing with their e-mail product allowing you to have infinite storage. Now there was a time when Google’s Gmail product was the underdog and they decided to allow 1 gigabyte of storage and was pretty big step above the 4 megabytes Yahoo! provided.
Google immediately upped the ante and now Microsoft and Google are offering somewhere in the neighborhood 2 to 3 gigabytes of free email storage. It is also worth noting that Time Warner’s AOL service has been offering unlimited storage since last summer.
I guess the scale of what Yahoo! is doing is amazing to me just due to the fact that they're giving away unlimited storage for so many of their users. In fact in February Yahoo! email attracted 243 million visitors and Microsoft’s Hotmail had 233 million.
In the same month Google had 62 million visitors to their Gmail offering. It's important to note this number represents a 68% increase from the prior year. There is a great AP story that details what's happening with the various email providers. It also shows what seems to be the future of the internet and more importantly the future of services on the internet. Simply stated, the business model being pursued by many is to give software for free and then find ways to monetize it. This is obviously what Skype has done with their product -- giving away a free voice over IP client and utilizing the reach of the client to generate an enormous amount of revenue from added services.
Google also has done a great job spending a tremendous amount of money to build the best search engine and then monetizing the search engine with advertising. So it remains to be seen what other services will be become freely distributed and ad supported. I think this trend really bodes well for consumers and at the same time makes it a lot more difficult for other providers to compete with the likes of Yahoo!. It seems the only way to join in the e-mail party now is to do something out of the box.
So hats off to Yahoo! for giving away so much. With all this e-mail competition, consumers are going to be the winners.
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