E-Mail Change-of-Address Services Battle

At least three companies are vying for marketers' e-mail change-of-address business, although each is taking a different approach.

But some industry observers question whether the market can support more than one such company.

ActiveNames, a privately held company based in New York, wants to become the online version of the U.S. Postal Service's National Change of Address service, providing businesses with e-mail address updates for their customers. The company's services give consumers the ability to control which companies and individuals receive their new e-mail addresses.

ActiveNames uses a permission-based service and features an e-mail plug-in program that can be downloaded from its Web site, www.activenames.com.

ReturnPath Inc., Evergreen, CO, calls itself a universal e-mail management and change-of-address service. Like ActiveNames, Return Path offers businesses updated e-mail addresses for their customers and better management of their e-mail lists. It also gives consumers a place to manage their commercial e-mail relationships. Return Path recently received funding from DoubleClick and two venture capital firms and went live Dec. 11 with its service.

The company, whose service is available at www.returnpath.net, takes a different route from ActiveNames, using a contributed database. Marketers contribute their databases of e-mail names, and ReturnPath notifies consumers on the list that they can review their data. The company enables consumers to review which e-mail addresses are on marketers' files and allows them to update their data.

ReturnPath said 22 companies are enrolled in its network.

Veripost Inc., Superior, CO, this month announced a permission-based change-of-address service available to both marketers and consumers. The company is actually a network of nine companies. The founding partners are Digital Impact, directmedia.com, Impower, MessageMedia and Xchange. The network also includes Advertising.com, iGo Corp., StartSampling and Xdrive Technologies.

John Lawlor, president of EmailChannel, Boca Raton, FL, does not think the market needs more than one company providing change-of-address services. EmailChannel provides the MailMutt commercial e-mail search engine.

“It doesn't seem to be a space that can support multiple companies,” Lawlor said. “I would question if it's a space that can support a company with a sole business model.”

He believes change-of-address services might be better handled by larger, more diversified companies in a similar space, such as Bigfoot Interactive, New York, which provides numerous interactive marketing and e-mail services to businesses and consumers.

“Bigfoot offers e-mail for life,” Lawlor said. “They redirect your e-mail. It's an extension of a larger company.”

Brad Shapiro, vice president of marketing and business development at ActiveNames, agreed — to a point. He said there would be room for two companies, ActiveNames and someone else.

“Our model will survive because we're giving consumers real value,” he said. “There will be few companies able to survive in the space.”

Shapiro said that while other companies focus only on business customers and may pay lip service to the consumer end, ActiveNames serves both markets.

“If you use a co-op database [like the other companies do], you might be solving the businesses' problem, but not the consumers' problem,” he noted. “ReturnPath and Veripost are competing against each other.”

Naturally, Eric Kirby, Veripost's president/CEO, disagreed.

“We design our solutions to be the easiest to use for consumers and businesses,” he said. “There is no software to download. A company is not required to turn over their entire e-mail database to us. We act as a collector of e-mail change information.”

Both ActiveNames' Shapiro and Veripost's Kirby describe their businesses in similar terms. Each characterizes his company's change-of-address service as a “list cleaning service.”

“We've tried to model ourselves on the U.S. Postal Service's National Change of Address service,” Shapiro said. “With the NCOA service, you clean your list. That's what we do. Companies take their dead e-mail addresses and run them against us. They don't have to give us their database.”

Kirby espouses a similar theme. “Companies can use us as a cleaning service,” he said.

EmailChannel's Lawlor believes the market will eventually shake out, leaving only one company standing. One likely scenario, he said, is that most companies in the market will eventually be sold to larger companies.

“E-mail change of address is not one of those business models I jump up and down about,” he said. “When people change their e-mail address, it's either because they've changed jobs or are trying to get away from getting a lot more mail.”

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