benefits of capitalism?

Although the Communist Party of Canada may not agree, I've been noticing a little bit of beneficial capitalist competition recently: in the wake of Google's GMail, other free email providers have revamped their services.

Brad has never missed an opportunity to tout the excellence of Yahoo! Mail, which already offers 100MB of free storage. I seem to recall a time when you got 2MB of storage space, and email messages bounced because of full inboxes. My hotmail account is currently full almost to the brim, and I have to delete archived messages frequently; however, Microsoft recently stepped up to the plate with the promise (by email) of 250MB web storage with their hotmail service. Why the unprecedented magnanimity? What motivates a 125-fold increase in service at no extra charge?

The answer is simple: competition. Just as when in the Vancouver mayoral election, all candidates campaigned on the same platform regarding safe-injection sites, these businesses want to take away the competitive advantage Google would have had with fifty times more storage. What can be perplexing is the financial benefit to these companies. If you attempt to 'follow the money,' this strategy begs the question, "Why do private corporations compete to offer a free service?" There is neither government contract nor tax incentive to providing 'free email services.'

That, I believe, is the key. While email accounts may be provided free of charge, users are exposed to inescapable advertising, among other things. Free email is part of a larger network of services, some of them paid services. Google, Yahoo, and Microsoft are profitable companies. Microsoft and Yahoo! have been publicly traded for years, and Google is apparently planning an IPO.

Personally, I am just hoping hotmail makes good on its promises soon, so I need not switch exclusively to my Shawmail account (13GB of storage on my hard drive!) or sign up for Yahoo! Mail. In the meantime, I shall wait for further developments, and marvel at what free-market capitalism can be-but so rarely is.