The latest move in the war for user’s email box comes from Micrsoft. Last week, Microsoft announced custom domains, through a blog hosted by the custom domains team. To summarize
- You can register your domains anywhere
- You can host your domains anywhere
- You can have your email@ your domain hosted on hotmail for free
- Microsoft makes money by showing ads
- More importantly, they will give users (some) a reason to switch to hotmail.

The free email market is fairly mature and there is limited opportunity for any player to take significant market from another. Last year, gmail really changed the game by upping the disk space. With the other players increasing disk space significantly, we are back to the equilibrium.

This move by microsoft is attacking the next opportunity. Traditionally, email folks saw domain names as a “premium” service. Something users are willing to pay extra. Now, microsoft is willing to trade revenue from the premium service (which i bet was tiny) to more usage. Clearly, this is not as impactful as gmail’s 1G storage, but, an important move nonetheless.

I love this move. This is great for consumers. I have few domains of my own. I don’t really want to be forced to host my entire website with yahoo to get yahoo email. I want to be able to choose best webhosting for my site, best email hosting for my email. I used my ISP’s email hosting and they do a decent job. However, all the ISPs I hosted with fail quite badly with spam prevention. Here is where i was hoping the either yahoo, gmail or microsoft offer products. Now microsoft does. I hope Yahoo will match them soon.

I think the next step in this trend is to offer to ISPs a bundled service. So, joe-blo ISP can host the website and run the front end. They can however choose to outsource the difficult email hosting to a free email provider for a nominal share in the web hosting fees. It would be great to get a web hosting with dreamhost coupled with gmail as your email.

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