Is Facebook building a Gmail killer?

November 15, 2010

By Kevin Kelleher

Facebook is hosting one of its increasingly common “events” Monday to announce a new feature for its site. Along with Apple, Facebook is probably the only company at this point that could collect a large audience on short notice with only the vaguest of descriptions.

The invitation only said that the announcement would reveal what CEO Mark Zuckerberg would talk about on Tuesday at the annual Web 2.0 conference in San Francisco – in other words, it was an event to discuss a conversation that would happen somewhere else on a later day. But there were tantalizing hints in it that suggested Facebook would announce an e-mail service along the lines of Gmail and Yahoo Mail: The invitation had the red-and-blue stripes along the border that were once commonly seen on envelopes, and it bore Facebook’s email inbox icon from its iPhone app.

That gave blogs the weekend to speculate on what a Facebook email service would mean to the web. The most common analysis was that this could be a Gmail killer, a shot across the bow of one of Google’s most popular services. But I don’t see that happening—at least right away.

Instead, a Facebook email account is likely to hurt the other webmail services out there: Yahoo, MySpace mail, AOL mail, etc. Many of these services have seen the number of accounts dwindle in recent months as Gmail’s user base steadily improved. The exception seems to be Microsoft’s Hotmail. Not long ago, the web comic The Oatmeal had a telling cartoon describing what your email address says about your computer skills. Outside of Google, they weren’t flattering – and it only underscored the exodus from older web services to new ones like Facebook.

Over the weekend, AOL put out a press release announcing the preview of its not-quite-finished email service Project Phoenix – a name that seems a tacit acknowledgment of just how far AOL has had to go to become a major player in the web again. While AOL’s email audience has been dwindling it still accounts for 45 percent of page views on the AOL network. (Disclosure: I am a contributor to AOL’s DailyFinance.)

With those older webmail services shoved even further to the periphery of the web, this will help clear the battlefield for a showdown between Google and Facebook. Facebook has the clear advantage in social-networking—an area it thrives in while Google helplessly searches for traction. Google is emerging as a web company that—relative to Facebook’s standards, at least—holds up its users’ privacy. Both will see their email accounts grow for some time. Whether the web of the next few years is big enough for both of them is another question.

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