Tuesday, June 08, 2004

Tim Draper: Hotmail as Marketing?

In an article on the Always On Network, Tim Draper lists what he believes are the 3 most important contributions of the internet. He says email, search and -- soon -- internet telephony. Interestingly, he thinks the main benefit of Hotmail for Microsoft was as a marketing tool.

The other thing that Hotmail did is open up a new kind of business, which was in effect free marketing. Hotmail’s marketing budget was almost zero, but it reached 11 million people in 18 months. And it grew from there to (now under Microsoft) 200 million Hotmail users. That’s free marketing for Microsoft. And that’s quite valuable, because marketing tends to be 20% of your sales in most cases. So I’d say that’s the biggest impact.

The first commenter notes that Draper didn't mention IM as one of his top three, and I'd tend to agree there. IM is all but eclipsing email as a form of communication, especially for Generation Y and younger. I too use email as a last resort, or for things such as sending long documents.