Gmail Still Plays Hard to Get

Back when Google (Nasdaq: GOOG) launched its Gmail service in 2004, a gigabyte of storage for Web-based email seemed so bizarre that it was easy to believe the announcement might be an April Fool's Day joke. Yesterday, I saw a CNET headline announcing that Google was finally opening up the invitation-only service to the masses. Apparently, though, that piece of news was less than it appeared to be.

According to Google's press department, the invitations aren't going anywhere yet. However, Gmail is newly available to users in Brazil, Europe, the Middle East, and Africa. It had been previously expanded to Australia, New Zealand, Japan, Egypt, and Russia in 2006. (CNET's article originated from a reporter in its U.K. office, which may explain the confusion.) I also discovered a little-publicized fact; in addition to receiving an invitation from a current Gmail user, those who want to join the service can get an invitation code via their mobile phones.

Although the headlines proved a bit misleading regarding the extent of Gmail's new openness -- and may have revived debate about when, if ever, the service will emerge from its seemingly perpetual beta phase -- I hardly think it'd be a bad idea for Google to take down its invitation-only barriers. Though its astounding storage capacity was revolutionary at its launch (each user is now allotted 2.8 gigabytes and climbing), three years is a long time in technology. The initial uproar over its prestigious invitation-only status has died down quickly, too -- as have some of the fears that the service's targeted advertising might be too invasive.)

And of course, the competition quickly caught up. Yahoo! (Nasdaq: YHOO) and Microsoft (Nasdaq: MSFT) both increased the amount of storage in their Web mail applications, too. (On April 1, 2004, their mail services offered a positively quaint four and two megabytes of storage, respectively.) While I like Gmail's search and organization functions, I know many people who weren't willing to switch from their existing webmail accounts, or simply didn't like the look and feel of the Gmail interface.

Don't forget that many of Google's ancillary services, Gmail included, haven't achieved the same sort of dominance as its web search. Nielsen/NetRatings data from April 2006 showed that Gmail had only 7.1 million U.S. users, compared to 52 million for Yahoo! Mail.

Maybe Gmail has gained some additional ground by now, but Yahoo! Mail's had one heck of a lead. Gmail invitation are fairly easy for interested users to get, especially now that the service is offering them via mobile phones, but I'd guess that dropping those invitations altogether would really boost its membership. More Gmail users might bulk up the user base for its struggling Google Talk, Docs, and Spreadsheets services as well. I'm sure Google's got its reasons for Gmail's long, closed beta, but it seems to be losing some competitive ground in the process.

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Alyce Lomax does not own shares of any of the companies mentioned.