The competition

[Steve]

Challenges Face Free Email Services (Excerpts)

Jesse Berst, Editorial Director ZDNet AnchorDesk 9/7/98


...my job is to see past the hype and talk about what's really going
on. With that in mind, I wanted to take a realistic look at the
Internet's most popular free service -- free email. 

Free email accounts have been an Internet staple since they first
appeared two years ago. There are two types. Web-based email shows
email messages inside your Web browser. POP-mail services look and
work just like the ordinary email account you get at work or through
an ISP. In both cases, you "pay" for the service the same way you
"pay" for free TV -- through advertisements. 

Despite their apparent popularity, today's free email services face
four problems as they go forward: 

1. Bugs. Free email has been subject to several embarrassing
glitches. Just last month, for instance, Hotmail and other Web-based
providers were faced with two potential security breaches. POP-mail
providers have had their own problems, from swamped servers to hack
attacks to outages. 

2. Questions About Popularity. Some people sign up for free email on
a lark, but never really use it. Others use free email as their
second or third email account -- a place to send private messages
they don't want to appear in their company email. As a result, free
email doesn't get used as often as ordinary email -- something that
affects its value in the eyes of potential advertisers. 

3. Commoditization. What started out as an interesting idea has
quickly devolved into a commodity business. For instance, the Free
Email Address Directory now lists more than 400 sources of free
email. With free email so pervasive, it's getting hard for these
businesses to show a unique selling proposition. Indeed, many of the
email services that started the trend have since been sold to portals
such as Yahoo, Netscape and Microsoft. 

4. Lack of Functionality. Web-based email is not as robust, as fast,
or as convenient as standard email. It can be painfully slow to wade
through your messages. Furthermore, it is not integrated with your
standard email. If you're using it as your second account, you have
to put up with two separate address books, two mail archives, etc. 

Unless some innovative company solves these four issues, free email
will cease to be an important way to differentiate a Web site. As
for those portals that spent tens (or even hundreds) of millions to
buy a free email service because they had an intuition it would set
them apart -- well, they will have learned the hard way that there's
no such thing as a free hunch. 

Copyright (c) 1998 ZDNet
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