How Google And Gmail Dominated Consumer Email

By | February 27, 2020

Hi, I’m Gmail.
And I’m Hotmail. I have one gigabyte of
storage, which means I don’t have to keep
deleting my emails. Well, don’t you think
that deleting your emails can be
rather therapeutic? Sure, buddy. I can also
use keywords to search quickly through my email.
How about you? Well, I keep my favorite
emails in a folder. Like, uh let’s
see here, somewhere. Another moment here, sorry. Hey Hotmail, good
to see you again. Hello, Gmail. Looks like
I have 1.5 billion users now.
How about you? Well, just want to clarify,
my name is Outlook now. And let’s see, I
have a few hundred million users, but it’s not a
popularity contest, is it? No, of course not. Gmail is really dominating
that market for consumer email, which is a
bit odd because in most mature markets you have
an oligopoly of at least three players, but it
looks like Google is absolutely dominating
this market. With 1.5 billion users
worldwide, Gmail is now the most widely used email
provider in the world, but it was by
no means the first. When Gmail launched in April
of 2004, it became one of a number of
free email services alongside Hotmail and Yahoo Mail, which
were some of the first to introduce web-based
email in the 1990s. By 1998, Yahoo Mail already
had 12 million active users, and by 1999, Hotmail
had about 30 million active members. The Gmail
project came out of something called 20 percent
time, and this was something that was really
a hallmark of Google culture in the
early days. So 20 percent time
works like this. If the rest of your time,
if you took that one hundred percent and devoted 20
percent of it to a project that you were
interested in or excited about or passionate about
or wanted to chase down, that’s what
you could do. And Gmail came out of
that 20 percent time. Paul Buchheit started working
at Google in 1999 as its 23rd employee. He undertook creating Google’s
foray into the email world as his
20 percent project. At the time, the
project was codenamed “caribou,” an allusion to the
popular comic strip Dilbert. But not everyone at Google
was supportive of his vision. Even though we know
Gmail’s so big and the most used email
service, it almost didn’t happen because there were
so many arguments among executives about whether
they should actually pursue it. And it wasn’t
quite clear how Google could benefit from an
online email service when they were a search company.
One of the things that Google did was they
looked at problems as projects. So they put things
to what they called a toothbrush test. So if you were interacting
with a problem as much as you interact with
your toothbrush, then they were excited to
take that on. And email certainly fit
that bill because people used it all the time
and it was growing during this time. For something that
was use all the time, email in the early
2000s was still not very user-friendly. The first thing
Gmail set out to improve was storage. At the time, other email
providers offered up to 4 megabytes of storage. What that meant was you
had to delete, delete, delete all the time or
your storage would be full. And then if your
parents or an employer sent you an email,
it was bounced back. And the next thing you
know, your phone is ringing and someone is
saying, ‘I’m trying to email you and I
can’t get through.’ So that was the first
thing that they were going to address by offering
one gigabyte of storage. This effectively meant that
you would never have to delete email again. And this was revolutionary
at the time. So when Gmail first
released its product, it didn’t even have
a delete button. And this was to bring
home the point that you didn’t ever have to
delete an email. Ever! Gmail’s other
big improvement: search. Google offered that
signature, clutter-free look that you saw with the
Google homepage in Gmail. They also took a look
at using their search engine feature as a part of
the email so that if you wanted to find a
specific email that someone sent you on a specific
topic, it was easy. You just used the search
bar to find it. And at the time, no
one else offered that. Besides storage space and
search, Gmail also introduced a way of
grouping messages that many of us consider
standard today. Conversation threading grouped all
replies to a message in one place and
in order, making it easier to grasp the
context of a conversation. That was what Google was
all about, whether it was the search engine or
Gmail, they wanted to make it easier
for the user. When it was easier for
the user, more people bought in and adopted
this new technology. What gave Gmail some of
its capabilities was the fact that it used
a more advanced computer language called
JavaScript. What JavaScript delivered was
a much more interactive and responsive
experience for the user compared to the
competition, which was reloading each page, repainting
each page, and it was a slower process. And so JavaScript delivered
a much faster and more interactive experience
for the consumer. Gmail was launched in
2004, on April 1st. It was April Fool’s Day. So people actually thought it
was a hoax and it wasn’t real, but it was. Gmail initially launched in
a unique manner: as invite only. The reason
why Google, which turned out to be a wonderful
marketing ploy, made it exclusive and you had to apply
and try to get on the wait list for a
Gmail account is because they weren’t investing enough. They
couldn’t scale up the back end to meet demand,
and so they had to make sure that they were able
to keep up with the flow. And the only way they
could do that is to let people in
on invitation only. Gmail’s invite only rollout
made having a Gmail address a hot commodity. Some even went as far
as selling their Gmail invites on eBay. It wasn’t
until 2007 that Gmail finally launched to everyone
without an invite. Since about 2012, Gmail
has been doing exceedingly well compared
to the competition. At Google I/O 2012,
the company announced that Gmail had reached $425
million monthly active users. This put it
ahead of Hotmail’s self-reported 360 million
monthly active users and Yahoo Mail’s estimated
277 million users in 2011. At the time, there
were some disputes about the exact numbers, but
soon Gmail’s popularity became evident. In a
written statement to CNBC, Senior Director of Project
Management for Yahoo Mail, Josh Jacobson, said,
‘Gmail has seen user growth for a number
of reasons, including promotion as the default
email provider on Android devices and familiarity
driven by use in the enterprise and
education via Chromebooks.’ The main factors that have
led to the rise in popularity of Gmail. First of all, Google is
a central property on the web and so there’s
a halo effect. And so you go to Google
for YouTube and you go for Google Apps and for
search and for maps. Why not go for email? Gmail went from being an
underdog to the most used email service in the
world because it was able to incorporate a
lot of Google’s core technologies. Another example of
one of our core products, which we are
redesigning with A.I. is Gmail. We just had
a new, fresher look for Gmail, a recent redesign. Hope you’re all
enjoying using it. We are bringing another
feature to Gmail. We call it Smart Compose. So as the name suggests,
we use machine learning to start suggesting phrases for
you as you type. All you need to do is
to hit ‘tab’ and keep auto completing. Some of
Gmail’s more recent innovations include the
ability to schedule emails and Confidential
Mode, which prevents recipients from forwarding,
copying, printing or downloading your message. Though they are still
able to screenshot it. Another draw: being able to
use your Gmail sign in on other
websites and apps. When we look at ‘sign in
with,’ I mean, this is where we talk about
the competition between the digital dragons. And so you can sign
in with Facebook, you can sign in with Amazon, you
can sign in with Apple. And so the fact that you
can sign in with Google allows them to compete
head-to-head with those other digital dragons. And the fact that you can
use Gmail or Google to sign in really reinforces
the power of their control of that
consumer email market. We also see their presence
in the education space as leading to pull through
when folks select a consumer email address. And then, momentum
builds more momentum. And so as you get
tired of your old ISP-based email and you’re embarrassed
about your AOL email account, you look around and
you look at what your friends are using. And
if they’re gonna be using Gmail, you may tend
to move over to Gmail yourself. They started off
as a very innovative product and they’ve
continued to innovate. Gmail was gaining popularity fast,
but it was not all smooth sailing for
the new platform. Finding a way to monetize
Gmail had been a point of contention at
the company. Some people argued Gmail should
be a paid service from the get-go. But others
argued that in order for Gmail to have the most
reach, it needed to be ad driven. The ad revenue
model won out, but even before it launched the
general public in 2007, Google got heat for
scanning Gmail emails and using the contents
for targeted advertising. If you’re emailing someone
about, hey, let’s meet up and go sailing, and
then suddenly there was an ad for sailboat tours. It was unnerving for people
because it was so spot-on and people called
it creepy and spooky. And suddenly the headlines
were very negative for Google and for Gmail. The practice also made
some privacy groups and politicians uneasy. The year Gmail launched,
31 privacy and consumer groups sent a letter
to Google’s co-founders saying that scanning emails
for ad purposes, ‘violates the implicit trust
of an email service provider.’ Shortly after
Gmail’s launch, former California senator, Liz Figueroa,
even drafted a bill that would place
limits on the information gathered from scanning email
messages that could be shared with
third parties. The bill passed the
California State Senate, but died in the
state Assembly. It would take another 10
years after its wide public launch for Google to
commit to no longer scanning any Gmail account
for the purpose of personalizing ads. When we asked why it
took 10 years for the company to stop scanning
emails for ad purposes, a Google spokesperson emailed
CNBC directing us to this blog post. Google declined an on-camera
interview with CNBC. But this was not the
end to Google’s privacy problems. This headline just
dropping on Google that the company still
does allow other companies to scan and share
data from Gmail accounts. This according to The Journal,
citing a letter to U.S. lawmakers in which
Google says that the company does allow app
developers specifically to scan Gmail accounts. Even though, the
company, remember, itself stopped the practice for
the purpose of ad targeting last year. A month later, Google
issued new privacy policies that put limits on how
developers can use Gmail data. One of the
interesting things about Gmail is that even when
this controversy about privacy was unfolding and kind of
blowing up, more and more people started
to use it. And it was just so
much better than anything else that was out there that
that’s really when people started to say, you know,
maybe there is a privacy concern. Maybe I
am concerned about this, but this service is so
good that I’m using it anyway. Privacy became a
hot-button issue in 2018 as numerous tech
companies, including Facebook, Amazon, Apple and Google
were grilled by Congress about consumer
data privacy. With Americans carrying their
phones with them virtually at all times,
doesn’t the collection of this volume of detailed
information really mean that Google is
compiling information about virtually every movement an
individual with a smartphone is making every
hour of every day today? For any service we
provide our users, we go to great lengths to
protect their privacy and we give them transparency,
choice and control. In addition to email, users
of Gmail have access to a number of
free applications, including Google Sheets, Google Docs,
Google Drive and Google Hangouts,
among others. When you have Google
Apps associated with Gmail, it’s quite sticky, right? If you’re using Google
Apps associated with Gmail, you’re probably not
going to move. Google took office tools to
the web and forced Microsoft to do the same. Microsoft Office Web Apps
became available to the general public in 2010
and included free lightweight versions of
programs like Microsoft Word, Excel
and PowerPoint. But while Outlook may trail
Gmail and Google Apps on the consumer side,
Microsoft’s business suite offering, Microsoft Office,
still reigns supreme in the $18 billion
market for business productivity tools. In more recent years, Google
has also come out with a paid version of
its online apps called G Suite. G Suite includes
all of Google’s free office tool apps, as
well as additional features such as the ability to
create a custom email domain and admin controls
that are aimed at businesses. Outlook and Gmail
are similar in the sense that they both have
free and premium tiers as well as business
tiers, but they’re different in terms of where
their sweet spots are. I would say that Outlook
is widely used within businesses and government agencies
and Gmail is more popular overall
with consumers. Microsoft Office still
holds 87.5 percent of the business
productivity tool market compared to G Suite,
which holds 10.4 percent. But Google is
working to change that. Google unveiling its first
Gmail redesign since 2013. The overhaul has a
slew of new features designed to attract businesses
to take on Microsoft’s Outlook. Google says
it now has more than 5 million paying
G Suite customers compared to Microsoft Office 365, which
has more than 200 million paying customers. I think Gmail absolutely is
coming up in the corporate world and it is
happening as Google is taking G Suite
into businesses, government agencies, schools and
saying use this. Oftentimes, use this instead
of Microsoft Office. And soon, Gmail’s revenue
stream from consumers may also get a bump. Many free users are
quickly reaching their 15 gigabyte storage limit, which
is shared between Gmail, Google Drive and
photos, and finding that they need a paid
subscription to keep everything on the cloud. 15 years
later, Gmail’s big bet on storage may really
pay off.

65 thoughts on “How Google And Gmail Dominated Consumer Email

  1. Donny Vu Post author

    CNBC wasn't first to do analysis of companies on YT. But it will be the GMAIL of company analysis. Maybe one day this will pay off?

  2. IrishCarney Post author

    The killer app for me was Photos. After losing a bunch of photos on my MacBook because the iPhone / MacBook ecosystem didn't automatically upload photos to the cloud, I switched to Android / Chromebook which was not only much cheaper but faster and better. (The MacBook also kept borking up iPhoto, filling up the hard drive by duplicating my profile over and over, filling up my external hard drive backup etc). I'm sure Apple has resolved these problems by now, but at the time, Google was the way to go, and it was much cheaper to boot.

  3. Piyush Parmar Post author

    A centuries old method that is working flawlessly in technology world. It's a ironic 🙃
    PS: Barter System

  4. cooldbz12 Post author

    I actually prefer Outlook. The reason Gmail has so many user is becuase google forces you to make one for almost anything such as making a account on youtube.

  5. IcyMidnight Post author

    Step 1: make a product that far exceeds the quality of any other product in the space, in every aspect, and make it free.
    That's the only step.

  6. JC Larida Post author

    I had received a gmail invite back then. I liked it since day one.

  7. dimaseka syahputra Post author

    Hotmail are receiving my important mail in the spam, while received spam and marketing email in the inbox. That's what offed me to use them.

  8. vegeteriancannibal Post author

    I just watched another video that said, Sundar Picahi, the current CEO of Google was the one who thought of and carried forward the making of Google Toolbar, then Chrome and then Gmail… this video says something different

  9. Jac Catt Post author

    i have a hotmail/outlook and a gmail. i cant see why gmail is so much better? i have had my outlook for around 15 years and i dont delete emails..

  10. Lokesh Reddy Loki Post author

    But Outlook and other Microsoft products are backbone of IT industry

  11. Kenneth Chen Post author

    The first min reminded me of the mac vs PC ads that Apple used to air.

    "Hi, I'm a mac"
    "And I'm a PC….."

  12. FlashRedux Post author

    My main email is still my hotmail account, granted i think everyone has a gmail account as well, i think google just owns too many services not to have one.

  13. DannyDaDuffyDucking Daffer Post author

    Email: exist on device
    Me: 😡 cease!! Downloads Gmail

  14. curvyquill Post author

    The trouble is when the Youtube algorithm thinks you're a bad person, and terminates your whole Google account…

  15. Luis Portillo Reyes Post author

    I’ll look at you funny if you have something other than Gmail. Google is the norm 👨🏻‍💻

  16. 3rdman Post author

    "It wasn't quite clear how Google can benefit from an online email-service, when it was a search company."
    Isn't that pretty much the case for EVERYTHING that google does?
    To this day, pretty much the only thing they make actual money off is their search-service ads.

  17. 3rdman Post author

    "They used the advanced language called 'JavaScript'."
    Hahahahahahahahah, somebody actually called JavaScript "advanced". SMH.. (Granted it's the only "language" on the web, so you don't have any choice, but I wouldn't called it "advanced". Maybe "more flexible than HTML albeit being a totally illogical mess"…)

  18. frankthespank Post author

    I remember when Gmail came out and everyone was raving about it and I was all:

    “……so it’s e-mail, right?”
    People: “Yeah it’s so amazing it is the bestest thing in the world!!!!”
    “E-Mail… right? It’s… e-mail….?!?!”
    People: “You’re just jealous you don’t have Gmail!”
    “I have e-mail……… my ISP gives me an e-mail account, I use it all the time.”

    I never got it, when I got my Gmail account it didn’t fill anything in my life that I didn’t have before, I like it and all but it’s…. e-mail. (for the record I use e-mail, I’m not some texting internet baby idiot)

  19. Jackamomo Post author

    Actually, when Gmail switched from html to javascript Yahoo Mail had already implemented it which is why I stayed with it. I took me over a year before I realised the options link was hidden off screen to the right because the layout didn't shrink to the window size. Then I got what I thought was an email from my dad but turned out to be the notorious virus and I was locked out of Yahoo Mail for around a year. That was pretty much the death nell for the service (for me). I'm sure Google didn't instigate that virus.. I did like the layout though, it was OK. But it is still exactly as it was about 15 years ago. They still haven't updated it.

    I liked Yahoo Mail because you could (still can in fact) compose multiple emails at once and click between the javascript tabs without reloading the page.

  20. Azerty Qwerty Post author

    Google once started greatly, now they censoring right-wingers which is killing debate!

  21. Tnn Dll Post author

    If Google would just get back to innovating like the old days; instead of campaigning for Hillary Clinton. Democrat SuperPAC or Tech innovator? you choose Google.

  22. Noble Obodum Post author

    I can't stop binge watching al these CNBC mini documentaries lolol

  23. simon cao Post author

    Yahoo close my 1 year inavtive accounts 2 times. I was done with yahoo. It was around 2011

  24. goWise Languages Post author

    this video is a great reminder that I haven't cleaned my box in ages

  25. Star Butterfly Post author

    Google makes awesome apps but needs that sweet ad revenue to keep those apps awesome.

  26. Ben 590 Post author

    I use AOL but I use the Outlook desktop program to read my mail and manage my tasks and calendar.

  27. Ben 590 Post author

    I like MS office way more the the google office. but at school more people use google

  28. Parag Tech Videos Post author

    Gmail is only popular because of Android. They want every Android users to login only when you sign in to your google account. Remove Android from the market Gmail will lose its user base.

  29. Duerf Post author

    Now they just need to stop forwarding my important emails to Promotions folder.

  30. Nguyên Lê Bửu Vĩnh Post author

    Now, it doesn't seem like you can have both online privacy and good online services. I'm afraid we will need to redefine privacy in the future

  31. AcidDaBomb Post author

    I have been a paid google user for a few years now I pay $1.99 a month for the 100 gig storage. I think maybe in a year or two I might need to start paying $2.99 for the 200 gig

  32. Jerico Jopio Post author

    Wow, Gmail and Hotmail personified! Seriously, Gmail made it easy for us to send and keep track of our e-mails every time.

  33. Ali Post author

    Hmmmmmm really? Am I the only who has hotmail & gmail at the same time but uses hotmail for official things?

  34. Bibhuti Baishya Post author

    I stopped using gmail and switched to Protonmail as my secondary ( commercial) email and tutanota for my personal mail.
    The main reason is privacy because google knows too much about me and I don't like it.


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