RealTime IT News

Lycos Trumps Google on e-Mail Storage

By Ron Miller

Terra Lycos jumped ahead of rivals this week with a new e-mail service in Europe boasting 1GB of storage. But unlike Google's soon-to-be-released Gmail, Terra Lycos will charge approximately $6.17 per month for the service.

This news comes against a complex backdrop in which Lycos seeks to transform itself from search engine portal to community portal aimed at building social networks.

At the same time, Terra Lycos has reportedly put its U.S. Internet business, which includes Lycos.com, on the market for significantly less than what it paid.

Besides additional storage, the new e-mail service, as advertised on the UK Lycos site, offers a raft of features: spam protection; synchronization with Microsoft Outlook; 30 free instant messages per month; no banner ads; a free domain name; and up to 50 e-mail accounts.

Terra Lycos still offers a free alternative with 10MB of storage and a paid 100MB option and fewer services.

John Blossom, president of Shore Communications, a firm that analyzes content issues, thinks the e-mail announcement is an integral part of Terra Lycos' community strategy.

"It's a good move, and it's a move that's well-targeted towards their redefined goals," Blossom said. "Lycos is not trying to conquer universe from search engine on out. Instead, they are trying to do it from new content on in, trying to build community-authored content to draw people into the portal experience."

Blossom believes that for the portal vendors the new e-mail strategy is about gathering registrations. Yahoo! jumped on the bandwagon this week when it announced 100MB of free e-mail storage and a paid service with unlimited space. Blossom thinks storage limits matter because customers are concerned about storage limits on other e-mail services.

"People care to a certain degree. Anyone who has been on Hotmail where you have relatively low limits before storage fees will appreciate that to some degree, but one of the main motivations [for the portal vendors] is to have people who have a relationship with the portal to sell other services," Blossom said. "Registration for e-mail service is one of the keys to establishing the relationship to provide those other services, Blossom said.

Meanwhile Internet industry watchers are watching the sweepstakes for Lycos.com. Companies that might look to expand their membership rolls with a Lycos pickup include Google, MSN, AOL, and others.