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Facebook Email Will Hammer Google and Yahoo, and There's No Escape

Reports have it that Facebook will announce an email service at a meeting later today with press. Most "XYZ killer" pronouncements are overblown to the point of fatuity, and in this case, a Facebook email system won't be the end of any competitor. But it will be devastating to Yahoo (YHOO) and could significantly damage Google (GOOG). You can bet they've seen it coming, but it's a blow they can't avoid because of the nature of their businesses.

Back in May, I mentioned eight industries that Facebook could eventually take over. Last on the list, but hardly least, were email and Internet messaging:

Many people already use Facebook private messages and chat. Give the option to send messages within Facebook or externally to email, and making the jump from Yahoo or Google wouldn't be so difficult.
With Facebook email, many people would be able to begin running their online activities out of a single site, because they would have social networking and email. For chat, I wouldn't be surprised if Facebook either announced today an integration with other IM platforms or if that expansion was coming soon.

In other words, Facebook becomes a social portal with hundreds of millions of people using the platform. It is where they already are, so why go elsewhere for something like email? (Portals was another industry I thought Facebook could claim.) That's a crushing attack on Yahoo, which wants to be the center of people's online lives, but has nothing coherent to ensure that. Look what Facebook has already helped do to how people spend time on sites (data from (AMZN):

I listed Gmail separately. Notice how little average daily time per user it sees. I'd argue that many people, if not most, download their mail. That isn't possible on Yahoo unless someone has purchased the extended account, so email is probably a larger chunk of the time per day there than on Google. That suggests Yahoo is far more vulnerable to Facebook mail than Google.

But Google is also at risk because of the amount of data it collects via consumer emails. Whether you call the activity scanning, as Google prefers, or reading, as any normal human would name it, the company goes through gazillions of emails on a regular basis. That data is valuable, and Facebook email would have a chance to significantly cut into such behavioral marketing. (And how long before Facebook institutes a web search facility? It doesn't have to be as extensive as Google's, just good enough and handy.)

The problem for both the longer-established brands is that each is stuck. To remove the vulnerability on the email front would mean to change business so that email provision was not so important to strategy. That simply can't happen in the long run.

It's just another straw on the back, along with a comScore survey suggesting that Facebook gets 23.1 percent of display ad impressions. Put people into a web form for email and you can increase the time online and the number of ads to be delivered. You also remove the potential ad revenue from other sites -- such as Google or Yahoo.


Image: user lusi, site standard license.
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