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Analysis of Critical Path's Alliance with yesmail.com for Permission Email

Written By: P. Hayes
Published On: February 2 2000

Event Summary

Critical Path, Inc. (Nasdaq:CPTH), the dominant global provider of advanced Internet messaging and collaboration solutions, today announced a strategic relationship with yesmail.com (Nasdaq:YESM), the leading outsourcer of permission email technologies and services for permission-based email marketing.

Market Impact

Permission email service is equivalent to an opt-in-email service. In other words, when a user registers at an e-commerce site, he/she will be able to elect to receive or not to receive mailings based on their areas of interest. The Permission email service has increased response rates to e-commerce sites, proving the mailings to be more efficient than standard Internet Banner advertisements. As with all electronic mail, the cost of Permission email is approximately 90% less than standard direct mailings.

In direct correlation to the success of Internet based Permission email, advertising dollars are starting to be redirected from standard advertising companies, such as DoubleClick and put to use in the Permission email area (source: Forrester Research). Some Industry analysts expect Permission email to reach the $1 Billion (USD) mark by the 4th Quarter of 2002. Permission email will never displace the existing banner ads, which we have all come to know and at some level, despise. However, Permission email does allow for a concisely targeted market, based entirely on end user interests and in turn, increased advertising desirability. YesMail will be offered to Critical Path's customers within the next month (probability 90%).

User Recommendations

This announcement is a win-win situation, for both registered Critical Path users and the companies themselves. The YesMail service allows a user to select content areas to which he/she can subscribe if desired, or refrain from receiving any mailings whatsoever. The combination of email and advertising has usually been, and continues to be, primarily SPAM. While this arrangement will not reduce the amount of SPAM a user receives, it will give the end user control over what is received in his/her mailbox.

 
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