The new e-business gold mine

Fernando Jiménez Rodríguez. MBA Alumni. Instituto de Empresa

27 June 2004

The last few years have not been easy for e-companies. The dotcom crisis, lack of investors and the absence of sound business models have drowned the concept of virtual business in a sea of doubt.

The companies that have managed to survive are absorbed in a desperate search for income sources to consolidate their position, grow and generate confidence. Innovation is undoubtedly the magic word: it’s the term that generates growth and differentiation. We all know this; but knowing is one thing, successfully putting it into practice is a different kettle of fish entirely.

Some companies have found a way to lead the market. Their new struggle however is how to position themselves on the battlefield that is sure to occupy them for the next few years: e-mail.

Microsoft was first, with launch of Hotmail. Yahoo followed. Now Google has joined the race with its G-Mail.

Two strategic positions are set to come into play:

1. Microsoft has bet the farm on one plan and announced the end of free services, justifying its decision with incorporation of value-added services, such as anti-SPAM, to improve customer satisfaction and/or company productivity. We shall see if they can stop the new plague of automatic messaging, SPIM, which involves unsolicited messages that open automatically.

2. For its part, Google is taking advantage of the low cost of hardware, and particularly the cost of disk space, to offer a service that is objectively better (up to 1 Gb of storage space). On the other hand, mail will be filtered, and commercial notices related to the content of the message will be sent (context advertising). This is currently at the testing stage.

Who will win?

The arsenals of both contestants are very different. Microsoft has lots of money, and of course a large customer base. Its weak point is the bad image of its products. Behind Google’s spectacular growth are innovation, a fresh image and customer concern. However, it will have to steal customers from its competitors and convince them to change their e-mail addresses. It will also have to overcome any possible legal problems its system might entail.

We, the consumers, shall be the ones to decide who triumphs. But we must proceed with care. We are faced with a key tool in our communications systems, one we use to send sensitive information. It is also an inroad for frequent attacks that we could legitimately call sabotage attempts.

It would not be a positive decision to entrust one company with the fate of a market on which we depend so heavily, one which is so readily vulnerable to misuse - such as analysis and sale of information sent and/or received, or elimination of criminal evidence.

As consumers, we must be aware of the importance of our role and take consequent decisions. We all have a lot riding on this.

This is only the beginning, however. New competitors may arise, improving offers, reducing costs or specializing in market niches that are as yet unexploited.

Not everything has been invented in the field of e-business. Exciting times and decisions lie ahead, and they will certainly help blaze new paths in our market’s future.

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