Yahoo released their newly revamped Yahoo Mail, or Ymail, in the last week. It is good to see Yahoo putting effort into bringing life and energy back to its products like Flickr and Yahoo Mail.
The market for mail is fairly close. Gmail is in the lead with 425MM, Hotmail following with 325MM and Yahoo taking a close third at 289MM.
How can Yahoo steal market share from the first and second place players?
The first part is design, which Yahoo seems to be addressing (although the jury is out on if its new design is good or bad). Yahoo appeared to have let its products languish for far too long, and finally is putting effort in. Love it or hate it, customers will appreciate the effort, and even if they do hate it, good designers and product managers will notice the reaction and iterate improvements until they get it right.
Second, they need to find competitive advantage. This is difficult. Both Google and Microsoft Hotmail have tied their accounts into other services. It is difficult for someone to leave Hotmail when it is tied to their online Word documents, or to leave Gmail when it is directly connected to their YouTube, Hangouts or Google Drive account.
Third, they need to find their market and actively engage it. They need to find that advantage that will appeal to users and make them aware of it.
Fourth they need to market to businesses. Businesses? Isn’t Webmail all about consumers?
In some ways it is. But Google wisely recognized that businesses spend a lot of money on email services. Enter Google Apps for Your Domain, which eventually become Google Apps for Business/Education/Non-Profit. By relieving a business of its need to run painful Exchange servers and Outlook clients, without shedding the brand value of their own domain and styles, as well as archive, audit and security controls, Google grabbed lots of businesses, originally small and eventually large, who pay for the privilege of using Gmail. Further, employees customers became accustomed (“addicted” might be the better word) to using Gmail, and sought it out for their personal use.
Yahoo began to recognize this back in 2007 with its $350MM acquisition of Zimbra. While Zimbra of 6 years ago had nothing on today’s Google Drive services, Zimbra created a (squandered) opportunity to offer full-on business services.
Yahoo should go after the small businesses, eventually growing to the large ones, offering Yahoo Mail branded as the company’s own. There are still tens of thousands of firms around the world and many millions of users who could be captured if they hired an excellent product manager and went after the correct market in the right way.