An Internet Age update to the truism “there is no such thing as a free lunch” might be that there is no (longer) such a thing as a free e-mail account.
The cost of a free e-mail account is on the rise. Two of the Internet’s largest free Web e-mail providers, Yahoo and Microsoft’s Hotmail, have quietly added fee services to their e-mail offerings. At the same time, both companies have also cut back the number of free Web e-mail perks. They are not alone.
Mail.com, recently bought by Net2Phone, is pushing a number of “premium services” to its three million users. For example, you can get POP3 access to your e-mail from a software client such as Outlook for US$3.95 monthly, and e-mail forwarding for US$2.95 per month. Last August, free Web mail provider USA.net simply gave its seven million free e-mail customers an ultimatum: Pay US$50 a year or kiss your account goodbye.
Free Web e-mail isn’t likely to disappear entirely, but increasingly services are charging for popular features such as e-mail forwarding and extra storage. The problem, said David Ferris, president of Ferris Research, is that “these services simply aren’t paying for themselves.”
It’s another example of the new Net economy, as dot-coms seek new sources of revenue. Online advertising and targeted junk e-mail don’t cover the monthly server and administrative costs. Each free Web e-mail account costs about US$1 per month, said a representative of one service provider, who asked not to be identified.
“The trick is to make your e-mail product barely functional enough to use and then pile on a bunch of low-cost premium services to get (the user) to upgrade,” Ferris said.
Microsoft appears to be the most aggressive marketer of premium services. If you’re a Hotmail user who hasn’t checked your Hotmail e-mail in the past month, you’ve likely lost your account. If more than 2MB of e-mail is languishing in your in-box, your account is “temporarily disabled” until you delete some messages. And until you clean house, Hotmail bounces messages sent to your address with the reply: “Requested mail action aborted: exceeded storage allocation.”