One of the world's most popular online services last Thursday became the latest to give notice that it is to shut down. In an email to subscribers, the ListBot electronic mailing list management service warned that it will discontinue both free-of-charge and paid services August 6th and cease all operations two weeks later. The long-established ListBot service is used by around 90,000 businesses, consumers and interest groups to manage regular mailings to often large databases of users.
Unlike other free services, ListBot is not shutting down because it has run out of money. In 1998, its then owner LinkExchange was acquired by Microsoft, and the LinkExchange portfolio of email and banner ad management services subsequently became a core component of bCentral, Microsoft's online services portal for small businesses. Microsoft, of course, has plenty of money; it has simply decided that ListBot is uneconomic and warrants no further investment.
Subscribers have two months in which to download their email lists and message archives. Alternatively, they can transfer the data to either of two Microsoft services. The company is encouraging business subscribers to sign up for its paid List Builder service for a reduced annual fee of $149 (rising to the normal $269 after the first year). Consumers and voluntary groups can set up an MSN Communities site and transfer their ListBot data into the associated free email service.
Despite these arrangements, ListBot users will still be disappointed. The closure of ListBot demonstrates that not even ownership by a large, prosperous corporate parent guarantees the survival of a free or low-cost online service - a guarantee many may have relied on.
For others in the online services industry, the moral of this story is that even a company of the calibre and resources of Microsoft has failed to monetize the ListBot service, despite its established name recognition and currency with users. That suggests that transitioning free services into profitable, revenue-generating propositions is a far more difficult task than many once imagined. What, one wonders, does that bode for the future of HotMail?
Sharing HailStorm
The development of its .Net and Web services strategies was front-of-mind for Microsoft last week. Chairman and chief software architect Bill Gates personally launched a new initiative to involve third-party developers more closely in the evolution of its HailStorm XML-based Web services.
The Microsoft Shared Development Process (SDP) that Gates announced builds on existing mechanisms Microsoft uses for encouraging feedback on technologies under development, such as design previews and reviews, and adds new forums for feedback and collaboration on joint developments with partners and other third parties. The collaborative framework will provide procedural, technical and legal tools to help participating companies successfully manage joint projects.
The first project for the SDP will be the development of new HailStorm services. But Microsoft sees a broader role for the SDP once it has proved itself with the HailStorm extensions, particularly in the development of industry-specific XML schemas for sharing information and processes in a Web services environment. Ultimately, it believes companies might use the SDP to hammer out schemas without its direct involvement.
The proposed SDP appears to borrow a great deal in concept from the collaborative development communities that already support many open source projects. Although the concept of open source software itself is anathema to Microsoft, the company has chosen to adapt ideas that work well in those communities to the development of proprietary technologies.
But since Microsoft is not doing this out of altruism, there must presumably be a catch somewhere. Companies will either pay to participate in the SDP, or the SDP will charge some kind of levy for the use of technologies developed with its aid. The latter option raises the interesting possibility of Microsoft earning revenue each time an industry schema is used, even if it played no active part in the development of that schema.
So perhaps Microsoft has learned more about monetizing online services than its experiences with ListBot seem to suggest.
This review of the week's news highlights is by ASPnews.com founder and consulting analyst Phil Wainewright. A comprehensive news digest is published every month in the ASP News Review newsletter, available exclusively to subscribers.
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