The Critical 'I'

Read. React. Repeat.

Wednesday, March 31, 2004

branching out
Moving on a development that's been rumored for months, Google is about to launch it's own free email service, following in the footsteps of Yahoo! and other formerly pure-play search engines. Dubbed Gmail, its compelling features will include far more storage than other free email providers (1-gig) and, to complement that, the ability to search through archived messages.

The search/well feature sounds a lot like an online version of Bloomba, the email client that is itself inspired by Google's search functions.

I don't see how this does anything but pull Google's focus away from its core business of search. And of course, it's the same path that the former search engine kings like Yahoo! and Excite took at the turn of the century, when they tried to morph into "portals" that offered email and other features. I've maintained that Google owes its success, in large part, to the fact that the first wave of search engines ceded the search territory to Google, while they embarked on their fool's-gold quest of portalhood. Now Google is taking the same sort of steps. It feels like this is going to be a recurring theme in the Internet industry.

This is not surprising, given that Google is preparing for it's much-awaited IPO this year. In the run-up to issue stock, the company has to demonstrate that it's got solid revenue streams. For a media property like a website (or a magazine, or a broadcaster), that boils down to a handful of recognizable elements: Advertising, direct marketing, content creation/distribution, and similar services. Google's already got significant money rolling in from advertising, but it's got to diversify beyond that. Offering email is a golden opportunity to build a huge direct-marketing subscriber base; the plan is already in place for inserting advertising into the service in order to pay for it. As it matures, it'll be prime territory for all kinds of marketing efforts (which Google is counting on in lieu of charging for email, which is not considered a viable option).