Google shakes up the free (e-mail) world

A battle is brewing between Internet giants, and it's all over how much they can give away.

Microsoft and Yahoo contentedly offered free Web-based e-mail accounts that let travellers access e-mail from hotels or Internet cafes and allowed children to read e-mail on the Web rather than on their parents' e-mail readers. Storage space was limited so users had to frequently delete messages or pay a few bucks a month for more space.

A number of companies offered free Web e-mail, but Yahoo Mail and Microsoft's MSN Hotmail all but split the market. The companies generated revenue by selling ads. To attract more eyeballs, Microsoft and Yahoo added free instant messaging, a text-based Internet conference or "chat" between two or more people using compatible instant messaging software. These chat services competed directly with a similar service offered by AOL.

Last year, Google entered the free Web-mail market and shook up the duopoly. Google's Gmail offered huge storage capacity and search technology to help users manage all the information they could now store for free. Although Google doesn't display ads on its search engine home page, its revenue is almost exclusively ad driven and Gmail gives the now publicly traded company more eyeballs.

The free e-mail wars should be moot to businesses, says Max Haroon, president of the Toronto-based Society of Internet Professionals (SIP). "If you are a professional, then there is no excuse to not use an e-mail address under your own domain name."

However, Mr. Haroon acknowledges that free e-mail is a good way to "segregate" subscriptions to electronic newsletters from business or personal e-mail accounts and it provides a service to those who cannot afford an Internet service provider and connect to the Web at libraries and Internet cafes.

"These free Web-mail accounts are fantastic and in many ways help narrow the digital divide," says Emma Duncan, co-ordinator of business &e-services with the Brampton Library in Brampton, Ont.

She's recently moved from Hotmail to Gmail and "I'm sold on Gmail. It's fast and has great storage capacity. I also have a slow computer at home and Hotmail has too many graphics."

She's not alone in her migration.

Each month, up to 56 per cent of those switching to Gmail come from Hotmail, compared to about 30 per cent who switch from Yahoo, according to a study conducted by New York-based Return Path, Inc., a provider of e-mail management tools, including a service that lets e-mail users automatically forward mail from an old account to an new one when they change addresses.

Google's foray into free Web mail was still rattling the cages of Microsoft and Yahoo when Google introduced an instant messaging service and Internet telephony, Google Talk, a service that lets users make free computer-to-computer long-distance phone calls over the Internet. This brought Google into direct competition with Skype, the company that popularized free Internet telephony.

While Microsoft, Yahoo and Skype play catch up, Google is now the place to be if one wants a free on-line e-mail, chat and voice tools.

Google wants individuals using its service so it can generate more ad revenue. Google serves ads based on keywords in the e-mail of Gmail users. The logic being that if a Gmail user is writing about puppies, she may be more inclined to click on a dog food ad.

While some in the Internet community have accused Google of invading privacy, Mike Axworthy, president of Ax Computer Consulting in Red Deer, Alta., begs to differ.

"The issue of Gmail targeting ads based on e-mail content would not bother me. It is all done by computers. If any Google employee wanted to read my boring e-mails, he really needs a better hobby."

Striking back, Yahoo has simplified the way users can search e-mail messages, files and digital photos stored in Yahoo Mail. However, Google is all about search and is enhancing its e-mail search functions even as it rolls out instant messaging and voice over Internet protocol services. Search is important to those with massive amounts of data stored in Web-based e-mail accounts.

Abena Edugyan, a Calgarian who now living in Redondo Beach, Calif., uses Web mail to keep in touch with friends back home. She has Yahoo Mail and MSN Hotmail accounts but uses Hotmail "sparingly" because of its limitations in searching within e-mail messages.

Although Microsoft seems to have been caught flat-footed by Google, the software behemoth has bought an Internet telephony software company and plans to introduce related products.

Speculation is that Microsoft could add click-to-talk features to Internet Explorer, its Internet browser, so anyone using IE can place calls without downloading Google Talk or Skype Internet telephony software.

While the war of words continues, consumers reap the benefits of choice. And the price is right.


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