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Google's new sponsored e-mail service turns out to have some interesting self-imposed constraints.
The New York Times
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And about relevancy of the ads: you cannot expect a service in beata with perhaps a few tens of thousands of users active for a couple of months to be perfect. Especially not when the method used is a self learning algorithm. It will take a few million users and several months of use for the matching algorithms to self adjust.
Too much attention is given to the "privacy issue" related to Gmail. In my opinion it's a non-issue. It's just a matter of some mathematical formulas applied to the contents to produce some "related" links. As I see it the only information Google will have in the end is a collection of parameters that whan applied to a message maximize the probability that a link would be followed. Not something that can be "reverse-engineered" to reveal actual facts on the reader or sender (especially not the sender, as they would be aggregated by recipient, if at all).
There are far more interesting aspects to Gmail that are hardly discussed, such as how it would impact the rest of the industry: will other webmail provider or email client producers switch to the "conversation+search" paradigm? It seems to me that it can be accomplished using the existing IMAP specification or with slight revisions to IMAP, by trading the use of IMAP "mailboxes" as folders in favor of using IMAP flags as labels, and using IMAP's built in search. Of course this would probably make demand for better support of search in IMAP servers, and different IMAP clients.