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Lycos Europe beats Google to market with 1GB e-mail

By Reuters
London, 19 May 2004

Web portal Lycos Europe beat its larger rival Google to market with an e-mail service featuring 1GB of storage space, the company announced yesterday.

Lycos Europe said the new service went going live in the UK yesterday, with other European countries to follow.

Dangling massive storage space in front of e-mail customers is the latest ploy to encourage loyalty and to generate more subscription and advertising revenues. One gigabyte of storage would hold 250 000 e-mails or 2 000 photos or 250-300 songs.

Top Web search provider Google announced last month the company was developing Gmail, a 1GB service that remains at the stage of a limited trial.

Meanwhile, Yahoo this summer will start a phased introduction of expanded storage capacity for e-mail users.

Lycos Europe will charge British users lb3.49 ($6.15) per month for an ad-free e-mail service. The soon-to-be-public Google will offer a free service supported by advertisers who will be able to target users with promotional messages based on their e-mail conversations.

Google`s Gmail service has come under fire from various consumer rights watchdogs that maintain targeting ads in this manner constitutes a breach of a user`s privacy.

Lycos Europe intends to put the Gmail controversy to good use, promoting its rival service as ad-free. "The research we have done shows that privacy and security is incredibly important to consumers," said Alex Kovach, VP for Lycos Europe`s portal and communications business.

The loss-making Lycos Europe is aiming to double subscription revenues by offering a host of services ranging from online dating to Web site hosting. Currently, the company`s annual subscription revenue is in the millions of euros range, Kovach said.

Lycos Europe counts Terra Lycos and Bertelsmann as its biggest shareholders.