©Prof. Karen Clay. Hotmail Who are the customers –Millions of people who want web-based access to email Employees who often cannot use company systems.

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Presentation transcript:

©Prof. Karen Clay

Hotmail Who are the customers –Millions of people who want web-based access to Employees who often cannot use company systems for personal 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

©Prof. Karen Clay Hotmail Who are the customers –In exchange for free , 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

©Prof. Karen Clay Hotmail Value added relative to traditional –Free 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

©Prof. Karen Clay 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 – is a very sticky application Switching costs are high

©Prof. Karen Clay Hotmail Hotmail sold in January 1998 to Microsoft for $ 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 over?

©Prof. Karen Clay

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

©Prof. Karen Clay 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

©Prof. Karen Clay 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?