July 04, 2004

Email war and Google's marketing strategy::[View]

On April 1st, google announce the launch of their ambitious mail service system—Gmail, which can uniquely offer a mail storage as large as 1G as a free mail. Despite all the obvious feasures of gmail, like large storage mail size, unique mail searching and organizing method, here we will focus on the current mail war among the major email service providers, and also pay special attention to google’s marketing strategy.

Email War and Google’s way of marketing

After google’s first gunfire in the email war, yahoo is the first to respond by increasing its email storage as large as 100M, 1/10 of Gmail, and promising better virus-protection, and ad-scan service. Followed by Microsoft, the largest mail service provider, plan to increase all their hotmail user’s mail storage to 250 by early July.

First rule of marketing is that product should meet the market’s need, and market pull is always stronger superior to product push. For the usual industry cases, product push is only important for new start-up, venture capital and firm with large budget in R&D, while most successful cases are based on carefully serving the well-defined target market segment. Gmail proves its greatness by counter-proving this rule. It chose to enter the email market, which don’t have immediate need for new email account, as we already have at least email account. However, when google came out, we all want a gmail account in action, and we are eager to get others’ invitation. Google’s strategy at this level is simply that once it wants to beat this mature market, it must beat it hardly as unimaginable as 1 G mail. Gmail’s marketing also benefits from the carefully maintained reliable image and reputation.

There is still one advanced rule of marketing: to create a demand, even it doesn’t exist now. This demand is usually created by call up consumers’ new awareness or re-examine the original assumption. As derived from the email market, all major mail providers are crazy about expanding their business; Microsoft is slowly gaining large reward from their MSN Messenger Platform, which was launched up years ago, now they are integrating more business factors including ticket and hotel booking, car-renting, dating match etc. varied with local situation. Yahoo with its Yahoo messenger regarded as the follower but actually rival to MSN is far less successful than MSN messenger. When everyone’s mind is occupied with the fast expanding business, google quietly examine the original idea of email service, and try to call up people’s awareness of privacy and their advertise-averse instinct. Therefore, gmail’s demand is easily built up from this assumption.

For most of tech-firm, during product development and launch up, there is always countless meeting between marketing and engineering department. But when going to implementation, they only do their own stuff really, there must be immense investment of time and energy to align the two parties play with each other in an optimal way, that means no sacrifice of one party’s benefit in the favor of the other. Google’s marketing and technology department definitely work hand in hand with each other. They choose the “join by invitation” and “mouth by mouth” marketing approach. “Join in by invitation”: gmail has no publicly available application, only existing gmail users have the rights to invite their friends to join, and the number of invitation rights is given out and therefore controlled by Google. Words of mouth incurs least marketing cost but has strong convincing power between acquaintances, furthermore, they are consistent with goolge’s traditional tech-drive firm’s image. In a word, google knows best about the so-called viral marketing.

Look at this email war in all, google successfully integrate its tech-development and marketing strategy together, and gain its big edge in advance; but the revenue-generating model of gmail is still vague, as it also need to pay anti-ad service provided by Ad-sense inside google. The traditional mail service providers, like Hotmail and yahoo, who still can keep their users’ loyalty by some email-related tool, are acting in the dependence position, although they are taking action to respond and keep the existing user-margin, but they are getting to the weak side of this war, for they may not have foreseen the hidden strategy behind google.

Hidden strategy of google

As mentioned above, google’s “join by invitation” expanding approach is viewed as keep the marketing pace with technology development. As the technology of providing such large storage volumn may not be mature enough, and it may need to be adjusted from time to time during the fast-expanding stage. Control of the number of invitation rights is decided by google based on its tech-adoption rate, for my friend was allocated different number of invitations occasionally.

The real ambition of google as we analyze is not that simple; Google is secretly building up people’s networking tree. As we are sending out our invitations, only our close friends will be invited first, therefore they are becoming the first branch of our own networking tree, and later people invited by us is also first branch but in a father position. When friends invited by us become gmail users, they will invite their friends as well, and those ones will automatically counted as friends in the second sub-branch of the tree. In this way, the networking is expanding during gmail’s spread; and google will get all the picture of people’ relationship map.

Notice that google is also quietly providing a social networking service called Orkut, which has no significant advantage in the new SNS (social network service) industry compared to peers like LinkIN and Friendster. Those relationship maps are extremely valuable not solely for their SNS business, great value is lying for business beyond and time in the future. Well, google will also take privacy concerns into consideration as they always emphasis. We can sense the threatening potential from this new IT Giant, but we cannot tell anything about the future movement. Hope the goodness of business and technology going with bless of god.

Posted at July 4, 2004 12:50 PM by Lynne at 12:50 PM | Comments (1) | TrackBack(0) | Booso!| Niu.la收藏!

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