One of the hot fields Internet companies will compete for in future is expanding web-mail services. Internet giants like Google (Nasdaq:GOOG), Yahoo! (Nasdaq:YHOO) and Microsoft (Nasdaq:MSFT) have unsheathed their claws, announcing great plans for providing free e-mailboxes so large that users will never really have to worry about running out of space.
The expected war between the Internet giants is mainly being waged in the media, but there is already an Israeli participant providing free web-mail services. Walla Communications (TASE:WALA) launched free web-mail in Israel and the US four months ago, and in this brief period has already recruited a quite impressive number of customers, that it is disclosing for the first time today.
Walla! CEO Ilan Israely today, for the time, disclosed information about the company's upgraded web-mail service, and he has nothing to be ashamed of. Israely said the company's web-mail service already had one million subscribers in the US and that the number of Israeli subscribers had rise from 750,000 to 1.2 million. He added that Walla! had achieved these numbers without advertising, and that its entire costs for the program were for storage infrastructure, features and a little PR.
Rating website Alexa ranks Walla! in first place in web-mail with one gigabyte of free space. Figures from Walla! are very respectable, but the situation could change completely the moment Google completes the pilot for its gmail service, and launches it commercially. Gmail is expected to attract millions of users.
Israely said Walla! had invested $1 million to date in storage space and servers. He said that to reduce heavy costs, a team headed by Walla! CTO Erez Pilosof had spent months to successfully develop technology that compresses "over half" of stored material on servers. He added that "some foreign companies" were interested in this technology, and were considering buying it, but that negotiations were called off and there was nothing on the agenda at this time.
Israey said Walla!'s web-mail service was already profitable after four months. Although the profits aren’t apparently something to crow about, this is definitely a niche that justifies itself, and has considerable potential.
"The initial idea was to create a large database of users. We entered the free e-mail venture because we believe that online advertising is far from fulfilling its potential, and only a small part of the money now floating around the advertising world reaches the Internet. The money will increase with the development of various advertising technologies."
Israeli online advertising services company Cydoor Desktop Media is helping Walla! expand in the US and is responsible for advertising sales there.
Published by Globes [online] - www.globes.co.il - on November 25, 2004