Yahoo Puts Fees on Some Mail Services

All free Web-based e-mail services are trying to charge customers for "extras," but Yahoo has gone a step further, implementing fees for forwarding and some types of access.

Yahoo will charge customers who access their Yahoo Mail accounts using POP3 programs, as well as users who have their Yahoo e-mail automatically forwarded to other accounts. The fees for these services are $30 yearly, effective April 24. Any users who do not pay will lose access on that date, according to Yahoo. However, Yahoo is providing a discount deal to customers who commit before April 24, offering the first year of the services for $20.

Until now, users of Yahoo Mail could download e-mail onto their own PCs, through desktop e-mail programs that use the Post Office Protocol 3 (POP3) standard of receiving e-mail held from an Internet server. They could also automatically forward their Yahoo mail to a different e-mail account for free.

Joins Similar Fees

The company's new paid package was detailed in an e-mail message to its users on Thursday. The service permits users of Outlook, Eudora, and other POP3 applications to access and manage Yahoo Mail. It also allows users to automatically forward their Yahoo e-mail to another e-mail account, even a non-Yahoo one. And subscribers who pay the new fees will be permitted to send and receive e-mail with larger attachments, up to 5MB, the company says. Previously, Yahoo imposed a 1.5MB attachment limit on its service.

Yahoo has stepped up its efforts to market value-added services and turn some of its free customers into fee-paying ones. Customers' use of POP3 applications nips at Yahoo's ability to sell additional online storage, since those users' mail is stored on their local PCs.

Mail.com, now owned by Net2Phone, recently added POP3 access and e-mail forwarding to its Web-based mail service as a premium offering. It charges $4 monthly for POP3 access, $3 monthly for forwarding. Last year, Web mail provider USA.net began charging its 7 million e-mail customers, whose accounts were previously free, $50 annually.

Some 150 million free e-mail accounts are in use--and they are a potential revenue opportunity for the sites that manage them, say researchers at IDC. But charging fees for formerly free services online, and adding new ones that could entice customers to pay, is a growing trend.

Familiar Action

Yahoo rival Hotmail, owned by Microsoft, is not charging for such services--yet. However, Hotmail users report that the e-mail service is aggressively marketing its other services, which do carry a fee. For example, a recent mass mailing to Hotmail customers urged them to pay for additional online storage (priced at $20 for up to 30MB). Hotmail users risk losing their stored e-mail if their accounts are not accessed for a 30-day period. That threat is common to free Web-based e-mail.

Yahoo already offers storage space upgrades at $10 yearly for 10MB. It also dropped its free e-mail storage limit from 6MB down to 4MB.

Earlier in February, Yahoo clipped the apron strings on customers using FTP with the company's free GeoCities Web hosting service. GeoCities users who want FTP access now must subscribe to a pay service for $5 monthly, plus a setup fee. Yahoo also charges customers for several small-business services, including hosting, subdomain support, scripting tools, and multiple e-mail addresses.

Yahoo, which launched as a search engine and evolved into a portal, has even begun charging for one aspect of its root services, imposing fees for premium search content. The Premium Document Search service accesses 70 million pages from more than 7100 sources, and costs $5 monthly for access to up to 50 documents. Summary views of documents are free.

(Scarlet Pruitt of the IDG News Service contributed to this report.)