Ever wondered how email services like Gmail, Yahoo Mail, and Outlook.com are free to use? How can these services, which are used by millions of people, cost nothing?
On the surface, these services are free to sign up and free to use. However, companies like Google and Microsoft make money by collecting data from their users and then selling that information to third-party enterprises.
What Really Goes On In Email Services?
The process begins by the service scanning through emails and finding keywords to obtain information about the user and determining what advertisements would appeal most. The keywords will give insight to the behavior and preferences of the user.
For instance, a thread discovered on an email address may have a message about an upcoming work retreat in the woods. After finding this, the user then might see products for hiking shoes or camping equipment, since these products are associated with the outdoors which the user might, subsequently, be interested in ordering. Another example would be seeing advertisements for toothpaste, after citing the need to make a dentist appointment.
Afterwards, the data collected from emails will be stored for future references. This is the primary business model that companies like Microsoft and Google are using to make profit from their free to use email services. Analyzing the data, it is clear that this type of business model is very successful and lucrative. According to Statista.com, Google’s revenue in 2017 was $109.65 billion dollars. In 2015, Google made $67.39 billion dollars from advertising alone.
More and more people are using Gmail and Outlook.com email services every year. Launched in 2004, Gmail has grown to have over 1.2 billion users as of 2017. In 2016, Outlook.com had over 400 million users. Undoubtedly, users find the email services to be valuable and convenient, as both companies have seen an increase in members since each program’s debut.
As the Internet continues to be a primary source for communication and eCommerce, it makes sense for advertising and marketing companies to expand their reach while appealing to specific products that have the highest likelihood of being purchased. Furthermore, it saves the user from the hassle of searching for a product, and it allows the companies to sell their goods and services more efficiently. The businesses and the user both benefit from this kind of marketing. The user gets a quality service, at no cost, and the businesses make money from the user’s input and product preference.