One of the unwritten rules in Marketing is that you do not make major product announcements on April 1. For some reason, the smart people at Google's ignored this rule and soft-launched the widely anticipated Google email service (Gmail) on April 1. Give the date of the announcement, some people (even well known bloggers such as Doc Searls) actually thought that it was an April Fool's joke from Google.

It's not a surprise that some people thought the Gmail announcement was a joke since it sounded too good to be true. Google announced that they would be offering a free email service with 1 gigabyte of email storage. To put this in perspective, Yahoo charges $49.99/year for 100 MB of email storage. Apparently, Google has run their numbers and they feel that it's going to cost them $2/year to support 1 gigabyte of email storage. This must mean that either Google has superior infrastructure that is more efficient and cost effective than Yahoo's email infrastructure, or Yahoo has a huge margin on their email service which is not justified.

Of course, there is a downside to the Gmail service. Google plans to generate revenue from the service through contextual advertising that reads the contents of your email to display relevant ads. Since email privacy is a sensitive issue, the announcement has gotten many privacy activists concerned. I can understand the concerns raised by privacy advocates, but to me privacy is one of those complex and difficult issues that has to account for a lot of marginal scenarios that are open to abuse. Some of it can be resolved via the appropriate privacy policies, but over time, people will understand the limitations of their privacy through Gmail and adapt accordingly. For example, by now, most of us know that regular email is inherently insecure so we know that it's not a good idea to send credit card numbers and account passwords via email.

Privacy issues aside, the more intriguing aspect of Gmail is that if Google can truly provide a scalable and reliable email service with 1 gigabyte of email storage, Google has the opportunity to dominate email, which is the numer one online activity and the original killer app of the internet. We're starting to see some encouraging signs from early reviews which seem to indicate that Gmail is more than just another email clone. As expected, Gmail is search centric, which isn't very interesting given that Bloomba from Stata Labs already has a search centric email client. What is interesting is that Gmail has the ability to tag messages instead of storing them in personal folders. In fact, it's almost blog-like in the way you view, classify, and organize information. Since Gmail is still in the beta phase, it will be interesting to see what other features they roll into the service. Like search, I strongly feel that online communication and collaboration is still in it infancy with significant room for innovation and improvement.

From a marketing perspective, given Google's brand awareness and general dominance of the search space, it should be fairly easy for Google to take market share from Yahoo and Hotmail. If I were Yahoo or Hotmail, or even AOL, I would watch Gmail very closely. Unlike other Google services, Gmail is the trojan horse which allows Google to build a direct relationship with its users. Yahoo went through this transformation with My Yahoo and Yahoo Mail and Google seems to be following in their footsteps. Also, AOL and eBay have shown how fostering communication among its users and building a sense of community can be leveraged into significant revenue streams.

Google is now starting to assemble the right mix of services (search, Gmail, Orkut, Froogle) and if it can successfully integrate them under a cohesive Google brand and execute successfully, buying into the $20 Billion Google IPO is going to be like buying into the $600 million eBay IPO and holding tight. As Roger McNamee states in an interview with TheStreet.com on 1/6/2003:

Google is one of the most impressive private companies ever. I have such enormous respect for these guys; what they've done there is just breathtaking. I can't wait for these guys to go public because I'm never going to get the chance to own it privately. Let me tell you, it's not for lack of trying.

Given Roger's track record in Silicon Valley, this is high praise. Now all Google has to do is just go out and execute and the money will surely follow.