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Will Social Features Work for Email Providers?

Social networks, focusing instead on email providers like Yahoo, Microsoft and AOL, have started encroaching on the territory of MySpace and Facebook. If social networking is all about loyalty and personalization, then email and instant messaging are--in theory--the perfect place to mine that data. So why not combine all these services and let users stick a profile on their account? Google's Gmail, it seems, is already headed in that direction, allowing its users to chat with contacts from inside their in-boxes.

But social networks are headed in the same direction. Many Facebook users claim the social network has supplanted email as their central means of communication. And the prize for more and better features, as Facebook can attest, is more usage-more time spent means more ads consumed.

Email providers can't expect that users will bite if they simply build social networking features. According to comScore, there were 542.9 million users of Web-based email worldwide in August, compared to 483.7 million social-networking users. The margin of users is narrowing; in the future, email providers will have to compete with the MySpaces and Facebooks, which got a head start, enlisting thousands of developers to create programs to keep users at their sites.

Read the whole story at The Wall Street Journal »

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