Hotmail

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Hotmail

• Who are the customers
• Millions of people who want web-based access to
  email
• Employees who often cannot use company systems
  for personal email
• People who want extra accounts for
  privacy/management purposes
• People who travel
• People who want a fixed address even if they
  change jobs or ISPs

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Hotmail

• Who are the customers
• In exchange for free email, customers reveal
  demographic information
• Allows Hotmail to offer customized advertising
• How do they get customers to come to their site
• Word of mouth
• Media attention

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Hotmail

• Value added relative to traditional email
• Free
• Email access from any web browser anywhere
• Very low cost to try
• content delivery
• Additional (priced) services
• download via POP3
• instant messaging, personal storage
• virus scan, secure email

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Hotmail

• Value added relative to competitors
• Not much, easy to replicate
• May have some advantage in content
• Key first mover advantage, high mindshare
• Turning one time customers into repeat customers
• Email is a very sticky application
• Switching costs are high

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Hotmail

• Hotmail sold in January 1998 to Microsoft for
  300-400 million
• Nice example of a business plan
• Use with the article on writing a business plan
  to begin thinking about your business plan
• Where should Hotmail go from here? Is the day of
  free email over?

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Wells Fargo

• Early leader in online banking
• 1998 trying to refocus
• Attract and retail high value and high potential
  value customers
• Increase revenue per customer
• Reduce cost per customer

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Wells Fargo

• Eleven proposals, need to prioritize given
  limited resources
• Online account applications
• Bill Presentment
• Discount broker
• Mortgage applications
• Contact management system (internal)
• OFX (Open Financial exchange) for Money and
  Quicken accounts

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Wells Fargo

• Online community offering advice, chat, tools
• Interbank transfers
• Mondex (smart card) on the Internet
• Computer/telephony integration (internal)
• Online statements
• Suppose that WF can only afford to carry out four
  of these at this time
• Which four will offer the most value added for
  consumers?