Can .Mac Withstand the G-Force?


By Alex Salkever Anyone who hasn't heard about Google's bold, new e-mail product must have been hiding under a rock for the past few weeks. The folks at the Googleplex plan to offer free Web e-mail accounts with 1 gigabyte of storage capacity. That's hundreds of times more capacity than the current free offerings at Yahoo! (YHOO) and Microsoft's (MSFT) Hotmail.

It's not just the size that matters here, though. To pull off its plan, Google would have to build some extremely hardy software that can easily manage vast arrays of servers storing and managing e-mail accounts. It probably has already done so. Google is running a beta trial of Gmail with thousands of users and plans to have the service available to the public in the next few months.

Gmail has the potential to put the Web e-mail market on steroids. That, in turn, presents some interesting possibilities for Apple's (AAPL) own .Mac product. For $99 a year, .Mac subscribers get a veritable bag of goodies, including a .Mac e-mail account with virus protection, backup software, online file storage, and calendar-synching capabilities.

VANITY PLATE? All in all, it's an impressive package of useful stuff. (Full disclosure: I have criticized .Mac in the past on price, and I still think it should be cheaper -- see BW Online, 1/29/03, "What's with the Hassles from Apple?"). But Gmail makes a big chunk of that stuff somewhat irrelevant or redundant.

When Google adds the capability to download Gmail to desktop clients, then .Mac would become basically a vanity plate as an e-mail address. Gmail will also take care of your anti-virus needs, if you want it to. Ditto for file storage. Most people store files as e-mail attachments anyway, so .Mac's iDisk storage function becomes less alluring.

That leaves mainly free Web hosting, Web-design tools, and system backup as .Mac's standout offerings. They're nice but hardly worth $100 per year when competing services cost the same or less. A company called Xdrive offers 500 megabytes of storage for only $20 per year more than the cost of a .Mac subscription.

DOORS BLOWN OFF. What should Apple do? Here's one possible solution that could be a win-win for both companies. Apple should contract with Google to get Apple-branded Gmail. Google already offers a handful of search and online ad-placement services to third parties, including Time Warner (TWX) subsidiary America Online and Baby Bell SBC (SBC). So Google is clearly comfortable offering its services to help defray costs and extend its ad networks.

If Gmail itself is enough to render much of what .Mac offers redundant, consider also that other online services are doing a much better job at what Apple is trying to do with .Mac. The new blogging and online Web design and hosting site, Squarespace, simply blows the doors off what .Mac is offering right now. The tool allows newbie Webmasters to build quite intricate and personal sites without breaking a sweat.

What Apple has done better than anyone else is make digital-lifestyle applications that everyone can use. And that's what it should do with .Mac. How about an online music repository and jukebox that stores your iTunes library and allows access from any PC? Or a way to turn Apple's iSight Web camera, used for videoconferencing with the iChat instant messenging service, into a streaming surveillance camera? Or a hosted online photo service with an iPhoto user-interface that allows .Mac subscribers to upload pics from any PC? These are all things that would fit well with Apple's declared role as the ultimate digital lifestyle maven.

STICKING TO STRENGTHS. So a good strategy might be to revamp the .Mac service, with Gmail as the e-mail underpinning. Let Google do the heavy lifting, and Apple can share the revenues from ads served to the e-mail messages. (For those concerned about privacy from Gmail's controversial content scan, Apple could offer an opt-out and charge slightly more for the privilege.) Then, Jobs & Co. should evaluate whether the various remaining pieces of .Mac offer real value or need a refresh.

Finally, Apple should extend the service to encompass a bunch of new capabilities that strengthen its digital-lifestyle position. Stay away from commodity services, Steve. Just keep doing the stuff you do best, and let the experts at Google deliver the mail. Salkever is Technology editor for BusinessWeek Online. Follow his Byte of the Apple column, only on BW Online


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