/ 30 January 1998

The price of free e-mail

David Shapshak

Subscribe to a free e-mail service and you will discover that you are merely another notch in someone’s pitch to win advertising on the Internet.

Free e-mail on the Internet is driven by suppliers who view it as a way of enticing Web advertising. Their wares are displayed on a free e-mail home page, such as the very popular industry leader Hotmail. Each time any of the millions of free e-mail users send or receive, the home page is “hit”, so providing a ready-made market forced to view the adverts which pay for the whole thing.

“Hits” tell online advertisers how large an audience views their promotions. Tapping into this the way Hotmail does is good business. Signing up for free e-mail requires you to supply all your significant marketable details — such as your age, income, computer usage, sport and news preferences — all the valuable statistics which marketers use to sell their sites to advertisers.

Free e-mail has become one of the Internet’s boom areas. Hotmail has picked up around 10-million users in little over a year. Yahoo!, Excite and Lycos, three of the more popular search sites, have also introduced free e-mail, with Yahoo! getting its service in October by taking over Four11, creator of RocketMail, for $92- million.

Over the new year holiday, Microsoft followed by agreeing to acquire Hotmail for around $300-million.

Iain Osborne, marketing director of Yahoo!’s European operation, says that RocketMail — now called Yahoo! Mail — has been a huge success, with the number of users growing at around 30% a month. Analysts believe it has about 2,5-million subscribers.

That’ll sell a lot of advertising, but there are also advantages to the users.

You can access your e-mail from anywhere in the world, provided you have a phone line, computer and Web browser. Handy if you’re on the move, or need to mail something to yourself from someone else’s computer. But if you have to subscribe to an Internet Service Provider to get access, free e-mail becomes superfluous.

— Additional reporting by Jack Schofield