Question

Topic: Student Questions

Google Entry Into E Mail Services Baffled All Major Players Including Yahoo Who Have Increased Themail Box Size?

Posted by Anonymous on 7/3/2004 at 7:48 AM ET 125 Points
If a strong brand name from a particular field enter other field related to that field why are established player panick and chose a tactical attack and create barrier?like google is strong brand in web Crawler and now it has declared that it is venturing into E-mail services by giving 1GB mailbox .To tackle this yahoo incresed its mail box size to 100mb.do you feel it is the google brand that yahoo is afraid of or the feature of google.
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  • Posted by Deremiah *CPE on 7/3/2004 at 11:16 AM Accepted
    Kalpeshvadera,

    we can only speculate as to the reason for yahoo's strategic adjustment but it could be that yahoo is only following googles market lead. Maybe yahoo did not realize that there was even a market for this service and only now after Google has expanded yahoo is beginning to see the tangible benefits in the market place. What do you think? Is there anything else I can do for you?

    Your Servant, Deremiah, *CPE
  • Posted by Peter (henna gaijin) on 7/3/2004 at 2:36 PM Accepted
    First, you said that Google is a strong brand in crawlers, but I don't think I agree that the crawler technology is what their brand is. Their brand is in allowing people to find information quickly. The crawler technology is part of what enables them to do that, but it is the actual ability to do the search and how it comes out for the searcher that is the brand.

    In order for Google or Yahoo to make money at this, they need what are often called "eyeballs" (people going to the site). The more people that go to the site, the more the search engine company can make from advertising placed along with the searches.

    The Google mail would do two things - first it would add to the Google brand and connect more people to its searches (bringing more advertising revenue in through the Google search page). Secondly, they plan to put advertising in with the Gmail, propviding another revenue stream for Google.

    Yahoo has taken a defensive measure by adding to space. And they probably had to, as the Yahoo Mail has been one way to keep the eyeballs in at the Yahoo family of sites. If Google started taking away these people, Yahoo wouold get lower revenues from their advertising.
  • Posted by Chris Blackman on 7/4/2004 at 8:18 PM Accepted
    I thought the whole point of Google's mail offering was that they would provide the same search capabilities for your e-mail as they do for the web. So they are using their existing brand strength and leveraging that into a new form of usage.

    By doing so they are capturing more users, hence more readers for their advertising... By looking at the content of an e-mail and adding context-related advertising they will be targeting consumers with products they might actually be interested in. A bit like someone listening in to your conversation and then joining in with a suggestion on what you should buy to solve the problem you've just been talking about.

    If Yahoo think increasing the size of their mailbox to 100Mb is going to compete, they've missed the point. However, they may well be addressing one of the reasons people might defect to Google, although not very convincingly.

    An interesting conundrum. Will be interesting to see how Gmail fares in the market.

    Good luck.

  • Posted by Chris Blackman on 7/5/2004 at 9:37 AM Member
    Dear Kalpeshvadera

    I should think Gmail could well become a leader as Google's search engine facility is already well regarded as the leading tool in its class by most internet users.

    It is too early to tell whether Gmail will take over leadership from Yahoo and Hotmail as the service still has not been rolled out to the masses.

    The contextually-related advertising will probably help pull in the corporate clients wishing to reach a more targeted audience. The competition may force Yahoo and Hotmail etc to lift the quality of their products. But they will still be different products - how many people want searchability for their e-mails versus how many want other, Hotmail & Yahoo related benefits, such as instant messaging?

    Can Google handle the pressure of large numbers of signups? They seem to be a very well-funded business, and have been in operations a while. I suspect they will have tested their model quite well. Their phased rollout speaks of control over the design and usability, not of concern over getting dollars in the door. I suspect Gmail will do well.

    But then, what is MSN going to do with respect to search facilities? Perhaps Google will start to face much stronger competition in that market?

    Predictions are prone to error. One thing we can be sure of - it will be interesting!

  • Posted by Deremiah *CPE on 7/5/2004 at 10:31 AM Member
    Kalpeshvadera,

    I think that Yahoo's brand barrier is affected by Googles powerful position in the market place. Yahoo must begin to invision other options in order to create indirect pressure on Google other wise Googles strategy may allow them to get further out there as a leader in the market place. The economic circumstances of each company will determine whether Yahoo can sustain their positon for a long economic duration. I have some ideas for Yahoo but they need to be thought through from multiple angles. I hope this answers your question. If it does not please let me know. Thanks. Is there anything else I can do for you?

    Your Servant, Deremiah, *CPE
  • Posted by Peter (henna gaijin) on 7/13/2004 at 12:39 PM Member
    You wrote:
    it was really very educating to understand that this eyeball exposure is critical to success of any internet sevices. I wanna ask one thing regarding the eyeball exposure do u feel that the google can actually dislodge the yahoo leadership with this.

    First, not every Internet business is based on 'eyeballs'. There are a lot of sites that charge directly for services, such as Amazon.com and Ebay.com, and are making nice profits.

    Do I think that Google can dislodge Yahoo for leadership in email? It will be interesting to watch. Yahoo does have the head start, and their defensive move of increasing storage space likely will protect most of their current customer base.
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